A $1,200,000 Note Payable Requires 10% Annual Interest with Interest

Multiple Choice

A $1,200,000 note payable requires 10% annual interest with interest due monthly on the 15^th of each month.An interest payment of $10,000 was made on April 15^th and $5,000 of interest expense was accrued in an adjusting entry on April 30^th.The company makes the next interest payment due on May 15.How would the company record this transaction?

A) Debit Interest Expense for $5,000 and credit Cash for $5,000.
B) Debit Interest Expense for $10,000 and credit Cash for $5,000.
C) Debit Interest Payable for $10,000 and credit Cash for $10,000.
D) Debit Interest Expense for $5,000,debit Interest Payable for $5,000,and credit cash for $10,000.
E) Debit Interest Payable for $15,000,credit Cash for $10,000,and credit Interest Expense for $5,000.