A Mortgage Note Payable with a Fixed Interest Rate Requires

Short Answer

A mortgage note payable with a fixed interest rate requires the borrower to make installment payments over the term of the loan. Each installment payment includes interest on the unpaid balance of the loan and a payment on the principal. With each installment payment indicate the effect on the portion allocated to interest expense and the portion allocated to principal. $\begin{array}{cc} \text { Portion Allocated } & \text { Portion Allocated } \\ \underline{ \text { to Interest Expense } }& \underline{\text { to Payment of Principal }} \\\end{array}$
A) $\begin{array}{cc} &&\text { Increases} &&&&& \text { Increases } \\\end{array}$
B) $\begin{array}{cc} &&\text { Increases } &&&& \text { Decreases } \\\end{array}$
C) $\begin{array}{cc} &&\text {Decreases } &&&& \text { Decreases } \\\end{array}$
D) $\begin{array}{cc} && \text { Decreases } &&&& \text { Increases } \\\end{array}$