On January 1, Year 1, Needham, Inc., borrowed $10,000 at 6% for four years. On December 31, Year 1, Needham made its first installment payment of $2,886. Show the effect of the first installment payment on the accounting equation. Round the amounts to the nearest dollar. What is SE?
A. (2,286) Cash
B. (600) Notes Payable
C. (2,886) Notes Payable
D. (600) Cash
E. (2,886) Interest Expense
F. (2,886) Cash
G. (2,286) Notes Payable
H. (600) Interest Expense
I. 0 No Effect
Ans: H. (600) Interest Expense
Business
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