E$15\mathrm{.}10($LO $3),$ AP Dreiling Company borrowed $$300,000$ on January $1,2022,$ by issuing a $$300,000,8\%$ mortgage note payable. The terms call for annual installment payments of $$40,000$ on December $31.$

Instructions

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

b$.$ Indicate the amount of mortgage note payable to be reported as a current liability and as a long$-$term liability at December $31,2022.$