A state borrowed $10,000,000 on a nine-month, 9% note payable to provide temporary financing for the General Fund. At year-end, the note has been outstanding for six months. The state should report General Fund interest expenditures and interest payable on the short-term note in its financial statements of

a. $0; the interest will be recognized when it matures.

b. $450,000.

c. $450,000 unless the state does not expect to be able to pay the interest when it matures- in which case no interest expenditures should be reported for the current year.

d. $675,000.