On October 1 Eli's Carpet Service Borrows $125000 from First $\begin{array}{lrr} \text {Notes Payable } &127,500\\ \text { Cash } &&127,500\\\end{array}$

On October 1 Eli's Carpet Service borrows $125000 from First National Bank on a 3-month $125000 8% note. The entry by Eli's Carpet Service to record payment of the note and accrued interest on January a.
$\begin{array}{lrr} \text {Notes Payable } &127,500\\ \text { Cash } &&127,500\\\end{array}$

b.
$\begin{array}{lrr} \text { Notes Payable } &125,000\\ \text { Interest Payable} &2,500\\ \text { Cash} &&127,500\end{array}$

c.
$\begin{array}{lrr} \text {Notes Payable } &125,000\\ \text { Interest Payable} &10,000\\ \text { Cash } &&135,000\end{array}$

d.
$\begin{array}{lrr} \text { Notes Payable} &125,000\\ \text { Interest Expense } &2,500\\ \text { Cash } &&127,500\end{array}$