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question 5

Multiple Choice

[The following information applies to the questions displayed below.]

On January 1, Year 1, Mahoney Company borrowed $324,000 cash from Sun Bank by issuing a 5-year, 8% term note. The principal and interest are repaid by making annual payments beginning on December 31, Year 1. The annual payment on the loan equals $81,150.


-Which of the following shows the effects on the elements of the financial statement of the cash payment on December 31,Year 1?

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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