On March 1, 2016, Emerson Services issued a 9% long-term notes payable for $20,000. It is payable over a 5-year term in $4,000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2017. Each yearly installment will include both principal repayment of $4,000 and interest payment for the preceding one-year period. On March 1, 2017, ________. The accounting period ends on December 31.

Emerson must accrue $4,000 of Interest Expense

Emerson must pay $1,800 of interest to the note holder

Emerson must accrue the coming $4,000 as the current portion of principal payment

Emerson will receive $4,000 as an installment payment