Sterling Company. receives $550,000 when it issues a $550,000, 8%, mortgage note payable to finance the construction of a building at December 31, 2010. The terms provide for semiannual installment payments of $35,205 on June 30 and December 31.
Instructions
Prepare the journal entries to record the mortgage loan on December 1, 2010 and the first two installment payments (June 30, 2011 & December 31, 2011).