1. A business borrowed $50,000 on 1st May 2020 by signing a twelve-month loan agreement that specifies interest at an annual rate of 15%. No interest or principal payment is due until 30th April 2021. The business prepares financial statements on 30th June 2020. What will be the adjustment entry for this business?

   		DR Interest Payable $1,250 CR Interest Expense $1,250
   		DR Interest Payable $7,500 CR Interest Expense $7,500
   		DR Interest Expense $1,250 CR Interest Payable $1,250
   		DR Interest Expense $7,500 CR Interest Payable $7,500