Kinyae Electronics issues a $600,000, 10-year, 9% mortgage note payable on December 31, 2021, to help finance
Question:
Kinyae Electronics issues a $600,000, 10-year, 9% mortgage note payable on December 31, 2021, to help finance a plant expansion. The terms of the note provide for semi-annual blended payments of $46,126. Payments are due on June 30 and 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, 2021.
c. Show how the mortgage liability should be reported on the balance sheet at December 31, 2021. Remember to report any current portion separately from the non current liability.)
d. Record the first two instalment payments on June 30, 2022, and December 31, 2022.
Taking It Further
Indicate the advantages and disadvantages of making fixed principal payments versus blended payments.
Balance SheetBalance 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...
Step by Step Answer:
Accounting Principles Volume 2
ISBN: 978-1119502555
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak