A not for profit organization is currently working in Oman for the development of society. Initially to establish the structure, they obtained a loan from Bank Muscat. Now they are paying a total of RO 36,500 where RO 30,000 is the principal amount and RO 6,500 is the interest. If this transaction is from proprietary fund, then it will be recorded as ________________.

a.

Expenditure 36,500 Cash/Bank 36,500

b.

Long term Loan 36,500 Cash/Bank 36,500

c.

None of the options

d.

Long term loan 30,000 Interest expense 6,500 Cash/Bank 36,500