On January 1, 2018, Gundy Enterprises purchases an office for $283,000, paying $53,000 down and borrowing the remaining $230,000, signing a 8%, 10-year mortgage. Installment payments of $2,790.53 are due at the end of each month, with the first payment due on January 31, 2018.

Problem 9-1A Part 1

Required:

1. Record the purchase of the building on January 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

No	Date	General Journal	Debit	Credit
1	January 01, 2018	Buildings	283,000
		Cash		53,000
		Notes payable		230,000

Problem 9-1A Part 2

2. Complete the first three rows of an amortization schedule. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

Date	Cash Paid	Interest Expense	Decrease in Carrying Value	Carrying Value
01/01/18				$230,000.00
01/31/18	2,790.53
02/28/18	2,790.53

Problem 9-1A Part 3

Required:

3-a. Record the first monthly mortgage payment on January 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to 2 decimal places.)

No	Date	General Journal	Debit	Credit
1	January 31, 2018	Interest expense
		Notes payable
		Cash

3-b. How much of the first payment goes to interest expense and how much goes to reducing the carrying value of the loan? (Round your answers to 2 decimal places.)

	Interest Expense	Reducing the Carrying Value
First payment

Problem 9-1A Part 4

4. Total payments over the 10 years are $334,864 ($2,790.53 120 monthly payments). How much of this is interest expense and how much is actual payment of the loan?

Actual payments on the loan
Interest expense