Question: On August 1, a $40,800, 9%, 3-year installment note payable is issued by a company. The note requires equal payments of principal plus accrued interest

On August 1, a $40,800, 9%, 3-year installment note payable is issued by a company. The note requires equal payments of principal plus accrued interest of $16,118.23. The entry to record the first payment on July 31 would include:

Multiple Choice

Debit to Notes Payable of $16,118.23
Debit to Interest Expense of $3,672.00.
Debit to Cash of $16,118.23.
Credit to Notes Payable of $16,118.23
Credit to Cash $12,446.23

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