Problem 10-12A (Part Level Submission)

Laverne purchased a new piece of equipment to be used in its new facility. The $425,000 piece of equipment was purchased with a $42,500 down payment and with cash received through the issuance of a $382,500, 7%, 5-year mortgage payable issued on January 1, 2017. The terms provide for annual installment payments of $93,288 on December 31.

Need to know Part C. and how you got the answer.

(a) Your answer is correct. Prepare an installment payments schedule for the first five payments of the notes payable. Annual Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance Issue Date 382500 $ $ 1 93,288 26775 66,513 315,987 2 93,288 22,119 71,169 244,818 3 93,288 17,137 76,151 168,667 4 93,288 11,807 81,481 87,186 5 93,288 6,103 87,185 * Amount may be off due to rounding. Click if you would like to Show Work for this question: Open Show Work (b) Your answer is correct. Prepare the journal entry related to the notes payable for December 31, 2017. (Round answers to O indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 Mortgage Payable 66,513 Interest Expense 26775 Cash 93,288 Click if you would like to Show Work for this question: Open Show Work (c) Your answer is partially correct. Try again. Show the balance sheet presentation for this obligation for December 31, 2017. (Hint: LAVERNE Balance Sheet (Partial) December 31, 2017 Current Liabilities X Long-term Liabilities x Mortgage Payable 71,169 X Total Liabilities 244,818 Click if you would like to Show Work for this question: Open Show Work