Hamilton Electronics issues a $600,000. 8%, 10-year mortgage note on December 31.

2005. 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 $44,149. 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 and (2) the first two installment payments.

(c) Show how the total mortgage liability should be reported on the balance sheet at Decem-
. ber31.2006.