Question
2. Gilead Lab Corp. issues a $1,000,000, 4.50%, 10-year mortgage note on December 31, 2019. The terms of the note provide for annual install payments,
2. Gilead Lab Corp. issues a $1,000,000, 4.50%, 10-year mortgage note on December 31, 2019. The terms of the note provide for annual install payments, exclusive of real estate taxes and insurance, of $100,000. Payments are due on December 31.
- Complete the following table
| Annual Interest Period | Cash Payment | Interest Expense | Reduction of Principal | Principal Balance |
| Issue Date | ||||
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b) Record the journal entry of issuing mortgage note on December 31, 2019
| Date | Accounting Titles | Debit | Credit |
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c) Record the journal entry of first installment payment on December 31, 2020
| Date | Accounting Titles | Debit | Credit |
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d) Calculate and show the total amount of principal will be paid by the end of 4th year.
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Managerial Accounting
Authors: John Wild, Ken Shaw, Barbara Chiappetta
8th Edition
1264111924, 9781264111923
