Chico Company borrowed $$40,000$ on a four$-$year, $8\%$ installment note. How will this transaction affect Chico$$s financial statements?

Multiple Choice

Cash and notes payable increase by $$43,200$

Cash and notes payable increase by $$40,000$

Cash and interest payable increase by $$43,200$

Cash and interest payable increase by $$40,000$