Taylor Bank lends Guarantee Company $118,978 on January 1. Guarantee Company signs a $118,978, 7%, nine-month note. The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

a.

Cash 118,978

Notes Payable

118,978

b.

Interest Expense 6,246

Cash 112,732

Notes Payable 118,978

c.

Cash 125,224

Interest Expense 6,246

Notes Payable 118,978

d.

Cash 128,347

Interest Expense 6,246

Notes Payable 118,978

Interest Payable 3,123