On June 1, A company purchased equipment for $50,000 from IG Company, paying $20,000 in cash and giving a one-year, 9% note for the balance. What is the adjusting entries necessary at December 31, 2015? Assume straight-line amortization.

1. Dr. Interest Expense 1575 and Cr. Interest Payable 1575

2. Dr. Interest Expense 2700 and Cr. Interest Payable 2700

3. Dr. Interest Payable 1575 and Cr. Interest Expense 1575

4. Dr. Interest Payable 2700 and Cr. Interest Expense 270