Question

The entry to record a monthly payment on an installment note such as a car loan:

_____ expense, __________ liabilities, ________ assets

Answer 1

The entry to record a monthly payment on an installment note, such as a car loan, includes debiting interest expense, and crediting liabilities and assets.

Step-by-step explanation:

The entry to record a monthly payment on an installment note, such as a car loan, would be as follows:

1. Debit interest expense
2. Credit liabilities
3. Credit assets

The debit to interest expense represents the interest charged on the loan, which is an expense for the borrower. The credit to liabilities represents the reduction in the outstanding loan balance, and the credit to assets represents the decrease in the value of the loan as it is being paid off.