On January 1, Year 1, Stratton Company borrowed $220,000 on a 10-year, 9% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $34,280 each December 31 for 10 years. The required general journal entry to record the payment on the note on December 31, Year 2 is:

Multiple Choice

• Debit Interest Expense $19,800; debit Notes Payable $14,480; credit Cash $34,280.

• Debit Notes Payable $19,800; debit Interest Expense $14,480; credit Cash $34,280.

• Debit Interest Expense $18,497; debit Notes Payable $15,783; credit Cash $34,280.

• Debit Notes Payable $34,280; credit Cash $34,280.

• Debit Notes Payable $220,000; debit Interest Expense $12,280; credit Cash $34,280.