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.

Question

Quizplus · Accepted Answer

The correct entry for a monthly payment on an installment note (like a car loan) increases an expense (interest expense), decreases liabilities (the outstanding loan balance), and decreases assets (cash or bank balance).

The Entry to Record a Monthly Payment on an Installment