On July 1, Shady Creek Resort borrowed $300,000 cash by signing a 10-year, 6% installment note requiring equal payments each June 30 of $40,760. What is the journal entry to record the first annual payment?

Question

Answer

Debit Interest Expense $18,000; credit Cash $18,000.

Answer

Debit Interest Expense $18,000; debit Notes Payable $22,760; credit Cash $40,760.

Answer

Debit Interest Expense $18,000; debit Interest Payable $22,760; credit Cash $40,760.

Answer

Debit Cash $300,000; debit Interest Expense $40,760; credit Notes Payable $340,760.

Answer

Debit Interest Expense $40,760; credit Cash $40,760.

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On July 1, Shady Creek Resort borrowed $300,000 cash by signing a 10-year, 6% in...

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