Foreman company obtained a $20,000, 6% loan on May 1, 2018. Principal and interest will be paid on April 30, 2019. On December 31, 2018, what adjusting entry would Foreman make related to this loan?

a. Debit Interest Expense: $1,200, credit Interest Payable: $1,200

b. Debit Interest Expense: $1,200, credit Cash: $1,200

c. Debit Interest Expense: $800, credit Cash: $800.

d. Debit interest Expense: $800, credit Interest Payable: $800

e. Debit Interest Expense: $700, credit Interest Payable: $700