Purpose: This exercise will illustrate the accounting entries for a long-term note payable.
The Weiss Corporation issued a $400,000, 10%, 10-year mortgage note on December 31, 2013. The terms provide for semiannual installment payments of $32,097.03 on June 30 and December 31. The note along with $80,000 cash was given in exchange for a new building. The accounting period is the calendar year.
Instructions
Prepare the journal entries to record:
(a) The acquisition of the building and inception of the mortgage loan payable.
(b) The first mortgage payment on June 30, 2014.
(c) The second mortgage payment on December 31, 2014.