Chasel Bank agrees to lend Herman Inc. 600,000 on February 1. Herman Inc. signs a 600,000, 8%, 9-month note. What is the adjusting entry required if Herman Inc. prepares financial statements on June 30?

a.

Interest Expense 20,000

Cash 20,000

b.

Interest Payable 48,000

Cash 48,000

c.

Interest Payable 20,000

Interest Expense 20,000

d.

Interest Expense 20,000

Interest Payable 20,000