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Kessel Company purchased a building and land with a fair market value of $400,000 (building, $300,000 and land, $100,000) on January 1, 2018. Kessel signed
Kessel Company purchased a building and land with a fair market value of $400,000 (building, $300,000 and land, $100,000) on January 1, 2018. Kessel signed a 15-year, 5% mortgage payable. Kessel will make monthly payments of $3,163.17. Round to two decimal places. Explanations are not required for journal entries. Read the requirements. Jan. 1 building land mortgage payable 300,000.00 100,000.00 400,000.00 Requirement 2. Prepare an amortization schedule for the first two payments. (Round all numbers to the nearest cent.) Principal Interest Total Ending Beginning Balance Payment Expense Payment Balance 1/1/2018 1913.17 1/31/2018 $ 400,000.00 2/28/2018 29808.83 1666.66 $ 1242.03 3,163.17 3,163.17 $ 400,000.00 298086.9| 296166| 1921.14 On June 30, when the market interest rate was 4%, a company issued $800,000 of 12%, 10-year bonds at 165.4057. Interest is paid each June 30th and December 31st after issuance. Assume the effective-interest amortization method is used. Below, record the company's journal entry needed on the first interest payment date and on the second interest payment date. (Round all amounts to the nearest whole dollar. Exclude journal entry explanations.) Dec 31 14919 Interest Expense Premium on Bonds Payable 33081 Cash 48,000 (B) Entry on the second interest payment date: Journal Entry Date Accounts Debit Credit June 30 Interest Expense 32783 15217 Premium on Bonds Payable Cash 48.000
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