On July 1, Shady Creek Resort borrowed $430,000 cash by signing a 10-year, 8% installment note requiring equal payments each June 30 of $64,083. What is the journal entry to record the first annual payment?
A. Debit Interest Expense $34,400; debit Notes Payable $29,683; credit Cash $64,083.
B. Debit Cash $430,000; debit Interest Expense $64,083; credit Notes Payable $494,083.
C. Debit Interest Expense $34,400; debit Interest Payable $29,683; credit Cash $64,083.
D. Debit Interest Expense $64,083; credit Cash $64,083.
E. Debit Interest Expense $34,400; credit Cash $34,400.
Answer: A
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