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Bank of America lends $1 million to a company in exchange for a $1million, 10-month note with a 6% interest rate.

How should the company record TWO months of interest?
 
a)Debit Interest Expense $50,000 Credit Notes Payable $50,000
b)Debit Interest Expense $50,000 Credit Interest Payable $50,000
c) Debit Interest Expense $10,000 Credit Notes Payable $10,000
d)Debit Interest Expense $10,000 Credit Interest Payable $10,000

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