Knowledge Check 01 Havier Corporation borrows $1 million from a bank on September 1, Year 1, by signing a 6 percent, nine-month note for the amount borrowed plus accrued interest due nine months later on June 1, Year 2. Which of the following is recorded on December 31, Year 1?

Multiple Choice

A. $20,000 credit to Notes Payable

B. $20,000 credit to Interest Payable

C. $20,000 credit to Cash

D. $25,000 debit to Interest Expense