Gamma Company adjusts its accounts at the end of each month. The following information has been assembled in order to prepare the required adjusting entries at December 31:

• A one-year bank loan of $720,000 at an annual interest rate of 6% had been obtained on December 1.
• The company's pays all employees up-to-date each Friday for a five-day workweek. Since December 31 fell on Tuesday, there was a liability to employees at December 31 for two day's pay (Monday and Tuesday). Employees earn a total of $12,800 per week.
• On December 1, rent on the office building had been paid for three months. The monthly rent is $7,000.
• Depreciation of office equipment is based on an estimated useful life of five years. The balance in the Office Equipment account is $12,360; no change has occurred in the account during the year.
• All fees totaling $19,800 were earned during the month for clients who had paid in advance.

What amount of interest expense has accrued on the bank loan?

Multiple Choice

$3,200

$3,500

$3,600

$3,900