On October 1, Steve's Carpet Service Borrows $€ 400,000$ From First National Bank on a 3month

On October 1, Steve's Carpet Service borrows $€ 400,000$ from First National Bank on a 3month, $€ 400,000,8 \%$ note. What entry must Steve's Carpet Service make on December 31 before financial statements are prepared?

A) $\begin{array} { l }\text { Interest Payable }&8,000 \\ \text {Interest Expense}&&8,000 \\\end{array}$

B) $\begin{array} { l }\text { Interest Expense }&32,000 \\ \text { Interest Payable}&&32,000 \\\end{array}$

C) $\begin{array} { l }\text { Interest Expense }&8,000 \\ \text {Interest Payable }&&8,000 \\\end{array}$

D) $\begin{array} { l } \text { Interest Expense}&8,000 \\ \text { Notes Payable}&&8,000 \\\end{array}$