The principal amount is to be repaid in full on June 30, 2011. Silmaril, Inc., reports on a calendar-year basis. Prepare all journal entries relating to the note during 2008, 2009, 2010, and 2011.

29. Accounting for a Mortgage Kohler Kleaners borrowed $50,000 on June 1, 2009, to finance the purchase of a building.

The mortgage requires payments of $525 to be made at the end of every month for 12 years with the first payment being due on June 30, 2009. The interest rate on the mortgage is 8%.

1. Prepare a mortgage amortization schedule for 2009.

2. How much interest will be paid in 2009?

3. By how much will the principal amount of the mortgage be reduced by the end of 2009?