Kinsella Seed borrowed $200,000 on October 1, 2008, at 10 percent interest. The interest and principal are due on September 30, 2009. What journal entry should be recorded on December 31, 2008?

a. Debit Interest Payable 5,000; credit Interest Expense 5,000.

b. Debit Interest Receivable 20,000; credit Interest Expense 20,000.

c. Debit Interest Expense 5,000; credit Interest Payable 5,000.

d. No entry is necessary