A $900,000 Note Payable Requires 10% Annual Interest with Interest

Multiple Choice

A $900,000 note payable requires 10% annual interest with interest due monthly on the 15^th of each month.An interest payment of $7,500 was made on April 15 and the next payment is due on May 15.As of April 30,$3,750 of interest expense has accrued.How would the company record the related adjusting entry?

A) Debit Interest Expense for $3,750 and credit Cash for $3,750.
B) Debit Interest Expense for $3,750 and credit Interest Payable for $3,750.
C) Debit Interest Payable for $3,750 and credit Cash for $3,750.
D) Debit Interest Payable for $3,750 and credit Interest Expense for $3,750.
E) Debit Interest Expense for $3,750,credit Interest Payable for $3,750 and credit cash for $7,500.