Trawler Company borrowed $500,000 on December 31, 2017, by issuing a $500,000, 7% mortgage note payable. The terms call for annual installment payments of $80,000 on December 31. (This exercise is addressed in Appendix 10C.)

INSTRUCTIONS

(a) Prepare the journal entries to record the mortgage loan and the fi rst two installment payments.

(b) Indicate the amount of mortgage note payable to be reported as a current liability and as a long-term liability at December 31, 2018.

Snyder Software Inc. successfully developed a new spreadsheet program. However, to produce and market the program, the company needed additional fi nancing. On January 1, 2016, Snyder borrowed money as follows.
1 Snyder issued $500,000, 11%, 10-year bonds. The bonds sold at face value and pay interest on January 1.
2 Snyder issued $1.0 million, 10%, 10-year bonds for $886,996. Interest is payable on January