A corporation borrowed $131,000 cash by signing a 5-year, 10% installment note requiring equal annual payments each December 31 of $34,557. What journal entry would the issuer record for the first payment?

Debit Notes Payable $34,557; credit Cash $34,557.

Debit Interest Expense $8,357; debit Notes Payable $26,200;

credit Cash $34,557. Debit Notes Payable $34,557;

debit Interest Payable $13,100; credit Cash $47,657. Debit Notes Payable $13,100; credit Cash $13,100. Debit Interest Expense $13,100; debit Notes Payable $21,457; credit Cash $34,557.