On August 1, a $48,000, 9%, 3-year installment note payable is issued by a company. The note requires equal payments of principal plus accrued interest of $18,962.63. The entry to record the first payment on July 31 would include:

Multiple Choice

• Debit to Notes Payable of $18,962.63

• Debit to Interest Expense of $4,320.00.

• Debit to Cash of $18,962.63.

• Credit to Notes Payable of $18,962.63

• Credit to Cash $14,642.63