On May 1, 2010, Arch Corporation Borrowed $2, 500 on a Two-Year

On May 1, 2010, Arch Corporation borrowed $2, 500 on a two-year, 6% note payable.Interest is due and payable at the end of each six months.Arch makes all interest payments on schedule.The correct December 31, 2010, adjusting entry would be

A)
$\begin{array}{lll}\text { Interest Expense } & 25 & \\\text { Interest Payable } & & 25\end{array}$
B)
$\begin{array}{cc}\text { Interest Payable } & 100 \\\text { Cash } && 100\end{array}$
C)
$\begin{array}{lr}\text { Interest Expense } & 25 \\\text { Cash } && 25\end{array}$
D)
$\begin{array}{lrr}\text { Interest Expense } & 100 \\\text { Interest Payable } & & 100\end{array}$