The entry to record a monthly payment on an installment note such as a car loan:
A)Increases expense,decreases liabilities,and decreases assets.
B)Increases expense,increases liabilities,and increases assets.
C)Increases expense,decreases liabilities,and increases assets.
D)Increases expense,increases liabilities,and decreases assets.

Question

Quizplus · Accepted Answer

When a monthly payment is made on an installment note, it increases interest expense, decreases the liability (loan balance), and decreases assets (cash).

The Entry to Record a Monthly Payment on an Installment