B&A Co has issued preference shares that are redeemable at the option of the holder three months before the end of the year. it was probable that the holders would require redemption. What is the appropriate classification for the annual payment of $$20000$ to preference shareholders at year end?

$$Dividend $$20000.$

$$Interest expense $$20000.$

$$Dividend $$3000,$ interest expense $$17000.$

$$Dividend $$9000,$ interest expense $$11000.$