Otto Electronics issues a $800,000, 8%, 10-year mortgage note on December 31, 2013. The proceeds from the

Question:

Otto Electronics issues a $800,000, 8%, 10-year mortgage note on December 31, 2013. 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 $58,865. Payments are due June 30 and December 31.

Instructions

(a) Prepare an installment payments schedule for the first 2 years.

(b) Prepare the entries for

(1) The loan

(2) The first two installment payments.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...