Gomez Service Company paid its first installment on a note payable in the amount of $2,000.How will this transaction affect the accounting equation?
A)increase liabilities Notes Payable and decrease assets Cash
B)decrease assets Cash and decrease stockholders' equity Note Payable Expense
C)decrease assets Cash and decrease assets Notes Receivable
D)decrease assets Cash and decrease liabilities Notes Payable

Question

Quizplus · Accepted Answer

Paying an installment on a note payable decreases the asset account Cash and decreases the liability account Notes Payable.

Gomez Service Company Paid Its First Installment on a Note