On August 1, a $60,000, 7%, 3-year installment note payable is issued by a company. The note requires equal payments of principal plus accrued interest of $22,863.10. The entry to record the first payment on July 31 would include: a) Debit to Notes Payable of $22,863.10 b) Debit to Interest Expense of $4,200.00. c) Debit to Cash of $22,863.10. d) Credit to Notes Payable of $22,863.10 e) Credit to Cash $18,663.10

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Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.