Exercise 10.6 Use of an Amortization Table (LO10-4)

Glen Pool Club, Inc., has a $152,000 mortgage liability. The mortgage is payable in monthly installments of $2,142, which include interest computed at an annual rate of 12 percent (1 percent monthly).

a.	Prepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the mortgages unpaid balance. (Round your answers to the nearest dollar amount. Enter all amounts as positive numbers.)

Amortization Table
Monthly Interest Period	Monthly Payment	Interest Expense	Reduction in Unpaid Balance	Unpaid Balance
Original balance
1
2
sheet is drawn here

b.	Prepare the journal entry to record the second monthly payment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

dynamic data to be inserted

dynamic data to be inserted

Record second monthly installment on mortgage payable.

Note: Enter debits before credits.

// QC #2326

Transaction

General Journal

Debit

Credit

1

 

 

sheet is drawn here

c.

Will monthly interest increase, decrease, or stay the same over the life of the loan?

	Increase
	Decrease
	Stay the same