1. On January 1, Harrington, Inc. borrows $63,000 from First Estate Bank. The loan is due in one year along with 4% interest. The company is preparing its quarterly report for March 31. Which of the following best describes the necessary accrual for interest expense?

a. $630 increase liabilities, increase expenses

b. $2,520 decrease liabilities, decrease cash

c. $2,520 increase expenses, decrease cash

d. $2,520 increase liabilities, decrease expenses

e. $630 decrease liabilities, decrease cash