Watauga County Bank Agrees to Lend Farm Café $500000 on January

Watauga County Bank agrees to lend Farm Café $500000 on January 1 2021.Farm Café signs a $500000 6% 9-month note.Use the following tabular analysis to record the proceeds and issuance of the note by Farm Cafe:

A) Increase to Interest Expense for $22500 increase to Cash for $477500 and an increase to Notes Payable for $500000.
B) Increase to Cash and to Notes Payable for $500000.
C) Increase to Cash for $500000 increase to Interest Expense for $22500 and an increase to Accounts Payable for $522500.
D) Increase to Cash for $500000 increase to Interest Expense for $22500 increase to Notes Payable for $500000 and an increase to Interest Payable for $22500.