Taylor Bank Lends Guarantee Company $150,000 on January 1 $\begin{array}{lr}\text { Interest Expense } & 12,000 \\\text { Cash } & 138,000\\\text { Notes Payable }&150,000\end{array}$

Taylor Bank lends Guarantee Company $150,000 on January 1. Guarantee Company signs a $150,000, 8%, 9-month, interest-bearing note. The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

A)
$\begin{array}{lr}\text { Interest Expense } & 12,000 \\\text { Cash } & 138,000\\\text { Notes Payable }&150,000\end{array}$
B)
$\begin{array} { l r } \text { Cash } & 150,000 \\\quad \text { Notes Payable } & 150,000\end{array}$

C)
$\begin{array} { l r } \text { Cash } & 162,000 \\\quad \text { Interest Expense } & 12,000 \\\text { Notes Payable } & 150,000\end{array}$

D)
$\begin{array}{lr}\text { Notes Payable } & 120,000 \\\text { Interest Payable } & 7,200\\\text { Cash } & 120,000 \\\text { Interest Expense } & 7,200\end{array}$