10.4A Preparation and Use of an Amortization Table L.O. 4 On September 1, 2011, Quick Lube signed a 30-year, $1,080,000 mortgage note payable to Mifflinburg Bank and Trust in conjunction with the purchase of a building and land. The mortgage note calls for interest at an annual rate of 12 percent (1 percent per month). The note is fully amortizing over a period of 360 months. The bank sent Quick Lube an amortization table showing the allocation of monthly payments between interest and principal over the life of the loan. A small part of this amortization table is illustrated below. (For convenience, amounts have been rounded to the nearest dollar.) AMORTIZATION TABLE (12%, 30-YEAR MORTGAGE NOTE PAYABLE FOR $1,080,000; PAYABLE IN 360 MONTHLY INSTALLMENTS OF $11,110) Interest Period Payment Date Monthly Payment Interest Expense Principal Reduction Unpaid Balance Issue date Sept. 1, 2011 $ 1,080,000 1 Oct. 1 $ 11,110 $ 10,800 $ 310 1,079,690 2 Nov. 1 11,110 10,797 313 1,079,377 -------------------------------------------------------------------------------- b. Prepare journal entries to record the first two monthly payments on this mortgage. (Omit the "$" sign in your response.) Date General Journal Debit Credit Oct. 1, 2011 (Click to select)Interest revenueCashAccounts receivableMortgage note payableSelling expensesInterest expenseSalesInterest payable (Click to select)Interest payableInterest expenseInterest revenueCashMortgage note payableAccounts receivableSalesSelling expenses (Click to select)Accounts receivableInterest payableSelling expensesInterest revenueSalesMortgage note payableCashInterest expense Nov. 1, 2011 (Click to select)Accounts payableAccounts receivableMortgage note payableCashBonds payableInterest expenseInterest payableSales (Click to select)CashInterest payableMortgage note payableAccounts payableSalesAccounts receivableInterest expenseBonds payable (Click to select)Bonds payableCashInterest expenseMortgage note payableSalesInterest payableInterest revenueAccounts receivable -------------------------------------------------------------------------------- c. Complete this amortization table for two more monthly installments those due on December 1, 2011, and January 1, 2012. (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) Amortization Table (12%, 30-Year Mortgage Note Payable for $1,080,000; Payable in 360 Monthly Installments of $11,110) Interest Period Payment Date Monthly Payment Interest Expense Reduction in Unpaid Balance Unpaid Balance Issue date Sept. 1, 2011 $ 1 Oct. 1 $ $ $ 2 Nov. 1 3 Dec. 1 4 Jan. 1, 2012