On July 1,Shady Creek Resort Borrowed $250,000 Cash by Signing

Multiple Choice

On July 1,Shady Creek Resort borrowed $250,000 cash by signing a 10-year,8% installment note requiring equal payments each June 30 of $37,258.What is the journal entry to record the first annual payment?

A) Debit Cash $250,000; debit Interest Expense $37,258; credit Notes Payable $287,258.
B) Debit Interest Expense $37,258; credit Cash $37,258.
C) Debit Interest Expense $20,000; credit Cash $20,000.
D) Debit Interest Expense $20,000; debit Interest Payable $17,258; credit Cash $37,258.
E) Debit Interest Expense $20,000; debit Notes Payable $17,258; credit Cash $37,258.