Accounting for a Mortgage

On January 1, 2012, Paik, Inc., borrowed $250,000 to ?nance the purchase of machinery. The terms of the mortgage require payments to be made at the end of every month with the ?rst pay- ment being due on January 31, 2012. The length of the mortgage is ?ve years, and the mortgage carries an interest rate of 12%.

1. Compute the amount of the monthly payment.

2. Prepare a mortgage amortization schedule for 2012.

3. Prepare the journal entry to be made on January 31, 2012, when the ?rst payment is made.

4. For the remainder of the year, how will the journal entries relating to the mortgage di?er from the one made on January 31?