Wisconsin Bank Lends Local Furniture Company $140,000 on November 1

Wisconsin Bank lends Local Furniture Company $140,000 on November 1. Local Furniture Company signs a $140,000, 3%, 4-month note. The fiscal year end of Local Furniture Company is December 31. The journal entry made by Local Furniture Company on December 31 is:

A) debit Interest Expense and credit Interest Payable for $700
B) debit Interest Payable and credit Interest Expense for $700
C) debit Interest Expense and credit Cash for $700
D) debit Interest Payable and credit Cash for $700