1.On July 1, 2014, Kirby Company received a $20,000 promissory note from Fox Company. The annual interest rate is 5%. Principal and interest are paid in cash in full at the maturity date of June 30, 2015.If Kirby's accounting year ends September 30, 2014, an adjusting entry is needed on September 30 to:

a.Increase interest revenue by $1,000

b.Increase interest receivable by $1,000

c.Increase interest receivable by $250

d.Increase notes receivable by $250

e.Increase notes receivable by $1,000

How do I calculate the answer? Please explain step by step, thanks.