On December 1, Casualty Insurance Company borrowed $50,000 at a 6.0% interest rate from One Mutual Bank. The note payable plus interest will not be paid until April 1 of the following year. The company's annual accounting period ends on December 31 and adjustments are only made at year-end. The adjusting entry needed on December 31 is:
A) No entry required.
B) Debit Interest Expense, $250; credit Interest Payable, $250.
C) Debit Interest Expense, $250; credit Note Payable, $250.
D) Debit Interest Payable, $1,000; credit Interest Expense, $1,000.
E) Debit Interest Expense, $1,000; credit Interest Payable, $1,000.
B) Debit Interest Expense, $250; credit Interest Payable, $250.
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Indicate whether the statement is true or false