On November 1, Alan Company signed a 120-day, 9% note payable, with a face value of $12,000. Alan made a December 31 year-end accrual for interest earned. What is the journal entry as of March 1 to record the payment of the note? (Use 360 days a year.)

• Debit Notes Payable $12,000; debit Interest Payable $180; debit Interest Expense $180; credit Cash $12,360.

• Debit Cash $12,180; credit Notes Payable $12,180.

• Debit Notes Payable $12,000; debit Interest Payable $180; credit Cash $12,180.

• Debit Notes Payable $12,000; debit Interest Expense $360; credit Cash $12,360.

• Debit Notes Payable $12,360; credit Interest Payable $180; credit Interest Expense $180; credit Cash $12,000.