On January 1, Year 1, Smart Touch Learning borrowed $10,800on a 3-year,8%

note payable. At December 31, Year 1 the business should record

A. A credit to Interest Payable of 864

B. Nothing since payment is not due until Jan. 1 Year 4

C. A debit to Interest Receivable of 864

D.. A credit to cash of 864