During an audit of Madison Companys December 31, 2017 records it was discovered that the company did not accurately accrue for $12,500 of depreciation expense. As well as the accrual for interest expense was missed in the amount $4,500. These errors occurred in 2016 and have a material impact on Madisons financial records. Madisons net income for the year was $123,000. The company is subject to a 35% tax rate. The company had a retained earnings balance of $557,500 on January 1, 2017, no dividends were paid.

What is the journal entry to record the gross adjustment for interest expense?

a. Retained earnings 4,500

Interest Payble 4,500

b. none of these answers

c. Interest Receivables 1,575

R/E 1,575

d. R/E 4,500

Bonds Payable 4,500