On March 1, a retailer borrowed $30,000 from its bank, and signed a 6%, 10-month promissory note. Principal and accrued interest are due on January 1. If the retailers year end is July 31, the year end adjusting entry to record interest would be:

Select one:

a. debit Interest Receivable, $900; credit Interest Revenue, $900.

b. debit Interest Expense, $1,800; credit Interest Payable, $1,800.

c. debit Interest Expense, $600; credit Interest Payable, $600.

d. debit Interest Expense, $750; credit Interest Payable, $750.

e. debit Interest Receivable, $1,500; credit Interest Revenue, $1,500.