Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note on December 31, 2007. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provide for semiannual installment payments, exclusive of real estate taxes and insurance, of $29,433. Payments are due June 30 and December 31.
Complete the installment payments schedule for the first 2 years. (Round answers to 0 decimal places, e.g. 125. Use rounded amounts for future calculations.
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Semiannual
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Cash Payment
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Interest Expense
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Reduction
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Principal Balance
|
|
Interest Period
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of Principal
|
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Issue Date
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$
|
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1
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$
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$
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$
|
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2
|
|
|
|
|
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3
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|
|
|
|
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4
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|
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Prepare the entries for (1) the loan and (2) the first two installment payments. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
| Date |
Account / Description |
Debit |
Credit |
| 2007 |
|
|
|
| Dec. 31 |
|
$ |
|
| |
|
|
$ |
| 2008 |
|
|
|
| 30-Jun |
|
$ |
|
| |
|
$ |
|
| |
|
|
$ |
| Dec. 31 |
|
$ |
|
| |
|
$ |
|
| |
|
|
$ |
Show how the total mortgage liability should be reported on the balance sheet at December 31, 2008.
| Current liabilities |
12/31/2008 |
| |
$ |
|
|
| Long-term liabilities |
|
| |
$ |