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On August 1st, 2019, XYZ Corp. took out a three-year bank loan for $30,000. The loan has an annual interest rate of 10%. What is the adjusting entry to record the accrued interest expense on December 31st, 2019 (year-end)?
A.
Debit Interest expense $1,250; Cr. Interest payable $1,250
B.
Debit Interest expense $3,000; Cr. Interest payable $3,000
C.
Debit Bank Loan $3,000; Credit Interest expense $3,000
D.
Debit Bank Loan $1,250; Cr. Interest expense $1,250