Maryburn Imports Ltd has decided to purchase a new office building. It purchased land and a building for $5 250 000 on 1 December 2019. Agreed financing arrangements included payment of an initial deposit of 10% of the purchase price and the signing of a 7.5% p.a. mortgage contract which provided for quarterly payments of $168 961.88 over 10 years. The first quarterly payment was made on 1 March 2020. The company’s financial year ends on 30 June.

Required

(a) Prepare a quarterly payment schedule for payments made in the years ended 30 June 2020 and 2021. Head the columns with the following titles: Payment Date, Unpaid Balance at Beginning of Quarter, Cash Payment, Interest for One Quarter, Reduction in Principal, Principal Balance at End of Quarter.

(b) Prepare journal entries associated with the land and building on 1 December 2019 for the financial year ended 30 June 2020. (The building was allocated 80% of the purchase price.) (Ignore GST.)