On March 1, 2015, Vinnie Services issued a 5% long-term notes payable for $20,000. It is payable over a 10-year term in $2,000 principal installments on March 1 of each year, beginning March 1, 2016. Each yearly installment will include both principal repayment of $2,000 and interest payment for the preceding one-year period. The journal entry to pay the first installment will include a debit to the Interest Expense account for $1,000.

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This is because each yearly installment includes both principal repayment and interest payment for the preceding one-year period, so the Interest Expense account will need to be debited for the accrued interest.

On March 1, 2015, Vinnie Services Issued a 5% Long-Term