Pauls business borrows 10,000 from the bank at an annual interest rate of 5.3%. Which three of the following six statements are correct?

1. The annual interest payment increases profit
2. When the loan is taken out, Pauls business assets increase and liabilities remain the same
3. When the loan is taken out, the asset of cash in the statement of financial position is increased by 10,000
4. The annual interest payment decreases cash
5. When the loan is taken out there is no effect on assets and liabilities
6. When the loan is taken out liabilities increase by 10,000