On October 1^st, 2020, Porcupine, Inc. borrows $20,000 from the bank, signing a four year note payable at 6% annual interest. Interest on the note payable is paid every September 30^th and the first interest payment will occur on September 30^th, 2021. Assume that the firm has an annual accounting period which ends on December 31^st and adjusting entries are only made at the end of the accounting period on December 31^st. No adjusting entry has been made yet. Which of the following is the correct adjusting journal entry to make on December 31^st, 2020?

Group of answer choices

Debit: Interest Payable $300; Credit: Interest Expense $300

Debit: Interest Expense $900; Credit: Interest Payable $900

Debit: Interest Expense $300; Credit: Interest Payable $300

Debit: Interest Expense $300; Credit: Cash $300

Debit: Interest Expense $1,200; Credit: Interest Payable $1,200