AAA Inc. has a December 31st year end. On January 1st, 2019, AAA Inc. took out a $50,000 bank loan. The loan has an interest rate of 10% annually. The loan and the interest will be paid at the end of five years. What adjusting entry is necessary on December 31st, 2019?
A.
Decrease Cash $5,000; Decrease Bank Loan payable $5,000
B.
Decrease Bank Loan payable $5,000; Increase Interest expense $5,000
D.
Increase Interest payable $5,000; Increase Interest expense $5,000