Cash SUOD 500,000 35.000 45.000 80,000 Mortgage Payable December 31, 2021 Interest Expense ($500,000 x 7%) Mortgage Payable Cash December 31, 2022 Interest Expense [($500,000 - 545,000) x 7% Mortgage Payable Cash b. Current: $48.150 Long-term: $406,850 ($500,000 - 545,000 - $48,150) 31.850 48.150 80,000 a17 Practice Problem Prepare entries to record issuance of bonds and long-term notes, interest accrual, and bond redemption (LO 1, 2, 3) Snyder Software Inc. has successfully developed a new spreadsheet program. To produce and market the program, the company needed $1.9 million of additional financing. On January 1, 2020, Snyder borrowed money as follows. 1. Snyder issued $1 million, 10%, 10-year bonds at face value. Interest is payable on January 1. 2. Snyder also issued a $400,000,6%, 15-year mortgage payable. The terms provide for annual installment payments of $41,185 on December 31. Instructions 1. For the 10-year, 10% bonds: a. Journalize the issuance of the bonds on January 1, 2020. b. Prepare the journal entry for interest expense in 2020. c. Prepare the entry for the redemption of the bonds at 101 on January 1, 2023, after paying the interest due on this date. 2. For the mortgage payable: a. Prepare the entry for the issuance of the note on January 1, 2020. b. Prepare a payment schedule for the first four installment payments. c. Indicate the current and noncurrent amounts for the mortgage payable at December 31, 2020