On January 1, 2015, a $60,000, 6%, 6-Year Installment Note

On January 1, 2015, a $60,000, 6%, 6-year installment note payable is issued by the Terry Corporation. The note requires that $10,000 of principal plus accrued interest be paid at the end of each year December 31) . The journal entry to record the secondannual payment would include:

A) A debit to Interest Expense for $3,000.
B) A debit to Notes Payable for $3,600.
C) A credit to Cash for $3,000.
D) A debit to Interest Expense for $3,600.
E) A credit to Cash for $3,600.

Correct Answer:

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