Question 3) QCC Co. issues a $600,000, 8%, 10 year mortgage note on December 31, 2016, to help finance a plant expansion program. The terms provide for an annual installment payment, $55,000. Payments are due December 31.

Required:

A) Prepare an installment payment schedule for the first 4 years.

Date Payment Interest Principal Balance

12/31/16 $600,000

B) Prepare the entries for 1) the mortgage loan and 2) the first installment payment.

C) Show how the total mortgage liability should be reported on the balance sheet at December 31, 2017.