3. A three-year discounted note payable, which requires a payment of $595,508 at maturity on December 31, 2010, had an adjusted balance of $530,000 at December 31, 2008. Assuming 6 percent annual interest, which of the following adjusting journal entries should be recorded on December 31, 2009?

a. Interest Expense 31,800 Interest Payable 31,800

b. Interest Expense 31,800 Cash 31,800

c. Interest Expense 31,800 Note Payable 31,800

d. Interest Expense 65,508 Note Payable 530,000 Cash 595,508