A company issues a $25,000 three-year note. The stated rate and effective rate were both 2%.

Which journal entry should be used to record the issuance of the long-term note payable?

Debit Cash for $23,500; Credit Notes Payable for $23,500

Debit Cash for $25,000; Credit Notes Payable for $25,000

Debit Notes Payable for $25,000; Credit Cash for $25,000

Debit Notes Payable for $23,500; Credit Cash for $23.500