Microsoft Inc. issues a 7% 10-year bond with a par value of $50 million on 6/31/2023. The market rate of interest for similar bonds is 3%. What is true of Microsoft Inc.'s adjusting entry on 12/31/2023?

A. Debit interest expense $2.01 million.

B. Debit interest expense $4.02 million.

C. Credit cash $3.5 million.

D. Credit interest payable $1.01 million.