A company made a $3,000 cash payment on a loan. Of the $3,000 cash paid, $2,400 was for interest expense and $600 was a payment to reduce the loan balance.

What is included in the journal entry necessary to record this loan payment?

1. Debit to loan payable for $3,000

2. Credit to loan payable for $600

3. Credit to interest expense for $2,400

4. Debit to interest expense for $2,400