Elite Electronics issues a $450,000, 10-year, 7.5% mortgage note payable on December 31, 2024. The terms of the note provide for semi-annual fixed principal payments of $22,500, plus interest, on June 30 and December 31. Elite Electronics’ year end is December 31. 

Instructions 

a. Prepare an instalment payment schedule for the first two years. Round all calculations to the nearest dollar. 

b. Record the issue of the mortgage note payable on December 31, 2024. 

c. Show how the mortgage liability should be reported on the balance sheet at December 31, 2025.

d. Record the first two instalment payments on June 30, 2025, and December 31, 2025. 

If the semi-annual payments were blended, would the amount of cash paid on a semi-annual basis be greater than, equal to, or less than the fixed principal payments made for the first two instalments? For the last instalment?