On March 1, Brutto Corp. issues a 3 year 5%, $60,000 note payable. The terms of the note include monthly blended principal and interest payments of $1,799. The entry to record the second instalment payment will include a
A) debit to Notes Payable of $1,555.
B) debit to Cash of $1,799.
C) debit to Interest Expense of $250.
D) credit to Interest Expense of $244.

Question

Quizplus · Accepted Answer

The second installment payment will include a debit to Notes Payable for the principal portion of the payment, which is $1,555.