Edmond Office Equipment borrowed $70,000 at a 5% annual interest rate on July 1. Principal and interest are due on December 31. The company's fiscal year ends on October 31. What adjusting entry should be made on that date? (Do not round intermediary calculations. Only round your final answer to the nearest dollar.)

No entry

Interest Expense1,750

Interest Payable1,750

Interest Expense1,167

Interest Payable1,167

Prepaid Interest1,167

Interest Payable1,167