On December 31, 2015, interest of $500 is owed on a bank loan that will not be paid until June 30, 2016. What is the neessary adjusting journal entry on December 31, 2015?

A. Debit Interest Expense and credit Cash got $500

B. Debit Interest Expense and credit Interest Payable for $500

C. Debit Interest Payable and credit Interest Expense for $500

D. Debit Interest Receivable and credit Interest Revenue for $500

Explain why the correct answer is correct and why the incorrect answers are incorrect.