On August 1, a $56,400, 7%, 3-year installment note payable is issued by a company. The note requires equal payments of principal plus accrued interest of $21,491.31. The entry to record the first payment on July 31 would include:

Debit to Notes Payable of $21,491.31

Debit to Interest Expense of $3,948.00.

Debit to Cash of $21,491.31.

Credit to Notes Payable of $21,491.31

Credit to Cash $17,543.31