The Edgartown Company Borrowed $480,000 on December 1,2014

Multiple Choice

The Edgartown Company borrowed $480,000 on December 1,2014.The note,which is due in 60 days,included interest at 8%.The company's fiscal year ends on December 31.How would the company record the adjusting entry relating to this note at December 31,2014?

A) Debit Interest Expense for $38,400 and credit Interest Payable for $38,400.
B) Debit Interest Expense for $6,400 and credit Interest Payable for $6,400.
C) Debit Interest Expense for $3,200 and credit Interest Payable for $3,200.
D) Debit Notes Payable for $483,200 and credit Cash for $483,200.
E) Debit Interest Expense for $3,200 and credit Cash for $3,200.