Dreilling Company borrowed $500,500 on January 1, 2017, but issuing a $500,000, 5% mortgage note payable. The terms call for annual install payments of $45,500 on December 31.

Prepare the journal entries to record the mortgage loan and the first two installment payments.

Indicate the amount of mortgage note payable to be reported as a current liability and as a long term liability at December 31, 2017.