A company takes out an eight-year, $860,000 mortgage on September 1. The interest rate on the mortgage is 5% per year, and blended payments of $10,888 (including both interest and principal) are to be made at the end of each month. The following is an extract from the mortgage amortization table:

Determine the missing amounts. (Round answers to 0 decimal places, e.g. 125.)

		Beginning Mortgage Balance			Payment			Interest			Principal			Ending Mortgage Balance
Payment 1		$860,000			$Enter a dollar amount rounded to 0 decimal places.	(1)		$3,583			$7,305			$Enter a dollar amount rounded to 0 decimal places.	(2)
Payment 2		852,695			10,888			Enter a dollar amount rounded to 0 decimal places.	(3)		Enter a dollar amount rounded to 0 decimal places.	(4)		845,360
Payment 3		Enter a dollar amount rounded to 0 decimal places.	(5)		10,888			3,522			7,366			Enter a dollar amount rounded to 0 decimal places.	(6)
Payment 4		837,994			10,888			3,492			7,396			830,598

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List of Accounts

Question Part Score

--/15

Prepare the journal entries to record the inception of the mortgage and the first two monthly payments. Ignore year end accruals of interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
Enter an account title to record the inception of the mortgage.	Enter a debit amount.	Enter a credit amount.
Enter an account title to record the inception of the mortgage.	Enter a debit amount.	Enter a credit amount.
(To record the inception of the mortgage)
Enter an account title to record the first monthly payment.	Enter a debit amount.	Enter a credit amount.
Enter an account title to record the first monthly payment.	Enter a debit amount.	Enter a credit amount.
Enter an account title to record the first monthly payment.	Enter a debit amount.	Enter a credit amount.
(To record the first monthly payment)
Enter an account title to record the second monthly payment.	Enter a debit amount.	Enter a credit amount.
Enter an account title to record the second monthly payment.	Enter a debit amount.	Enter a credit amount.
Enter an account title to record the second monthly payment.	Enter a debit amount.	Enter a credit amount.
(To record the second monthly payment)

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List of Accounts

Question Part Score

--/85

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