On August 1,a $30,000,6%,3-year installment note payable is issued by a company.The note requires equal payments of principal plus accrued interest of $11,223.34.The entry to record the first payment on July 31 would include:
A)Debit to Notes Payable of $11,223.34
B)Debit to Interest Expense of $1,800.
C)Debit to Cash of $11,223.34.
D)Credit to Notes Payable of $11,223.34
E)Credit to Cash $9,423.34

Question

Quizplus · Accepted Answer

The interest expense for the first year is calculated as $30,000 * 6% = $1,800. The entry would include a debit to Interest Expense for this amount.

On August 1,a $30,000,6%,3-Year Installment Note Payable Is Issued by a Company.The