On July 1,2011,Goode Company borrowed $100,000.The company signed a note payable with interest at 6 percent per year.The note and interest are due on December 31,2011.On December 31,2011,Goode paid $103,000 to settle the debt in full.Assuming no accruals for interest have been made during the year,transaction analysis of the $103,000 cash payment on December 31,2011 should reflect which of the following?

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Liabilities decrease by the face value of the loan, $100,000. Interest expense is $3,000 for the period, thus net income and stockholders' equity decreases by this amount. To recognize the payment of the loan and interest, assets must decrease by $103,000.

On July 1,2011,Goode Company Borrowed $100,000