The journal entry to record a payment on an installment note would include all of the following except:
A)credit to Cash
B)debit to Interest Expense
C)debit to Notes Payable
D)credit to Discount on Notes Payable

Question

Quizplus · Accepted Answer

A credit to Cash and a debit to Notes Payable would be recorded to show the payment made towards the installment note. A debit to Interest Expense would also be recorded to show the interest portion of the payment. However, a credit to Discount on Notes Payable would not be recorded as this account is used only when the balance on the note is initially recorded at a discount to its face value.

The Journal Entry to Record a Payment on an Installment