What effects would the accrual of $200 of interest on a note payable have on financial statements?

I.	Balance sheet: Liabilities are decreased by $200
II.	Income statement: Expenses are increased by $200
III.	Balance sheet: Retained earnings are decreased by $200
IV.	Balance sheet: Cash assets are decreased by $200
V.	Balance sheet: Liabilities are increased by $200

Select one:

A. II, IV and V

B. II, III and V

C. II, III and IV

D. I, II and III