On November 1, Year 1, Noble Co. borrowed $108,000 from South Bank and signed a 9%, six-month note payable, all due at maturity. The interest on this loan is stated separately.

At December 31, Year 1, the adjusting entry with respect to this note includes a:

Credit to Cash for $3,240.

Credit to Interest Payable for $1,620.

Credit to Notes Payable for $1,620.

Debit to Interest Expense for $3,240.