On January 1, 2018, Paik, Inc., borrowed $500,000 to finance the purchase of machinery. The terms of the mortgage require payments to be made at the end of every month with the first payment being due on January 31, 2018. The length of the mortgage is five years, and the mortgage carries an interest rate of 12%. Required:

(a)Compute the amount of the monthly payment. (The present value of an annuity of $1 at 1%, n=60, is 44.9550)

(b)Prepare the journal entry to be made on January 31, 2018, when the first payment is made.

(c)Prepare the journal entry to be made on February 28, 2018, when the second payment is made.