On January 1,2015,a $60,000,6%,6-Year Installment Note Payable Is Issued by the Terry

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 second annual payment would include:

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

Correct Answer:

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