On January 1, 2014, Gemstone Company obtained a $165,000, 10-year, 7% installment note from Guarantee Bank. The note requires annual payments of $23,492, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $11,550 and principal repayment of $11,942. The journal entry to record the payment of the first annual amount due on the note would include:

a. a debit to cash of $11,942.

b. a credit to Interest Payable of $11,550.

c. a debit to Notes Payable of $11,942.

d. a debit to Interest Expense of $23,492.