On February 1, Cullumber Ltd. signed a 4%, twelve-month bank loan payable for $ 162000 to help finance increases in inventory for the spring and summer season. Assuming no entries have been made previously for the interest on this loan, what is the required adjusting entry for the interest accrued to December 31?

A)

Interest Expense	540
Cash		540

B)

Interest Expense	6480
Interest Payable		6480

C)

Interest Expense	5400
Interest Payable		5400

D)

Interest Expense	5940
Interest Payable		5940