Recording and Assessing the Effects of Installment Loans: Semiannual Installments

On December 31, 2015, Wasley Corporation borrowed $400,000 on a 8%, 10-year mortgage note payable. The note is to be repaid with equal semiannual installments, beginning June 30, 2016.

Required a. Compute the amount of the semiannual installment payment using a financial calculator or Excel, and round amount to the nearest dollar. Payment: $Answer

b. Prepare the journal entry (1) to record Wasleys borrowing of funds on December 31, 2015, (2) to record Wasleys installment payment on June 30, 2016, and (3) to record Wasleys installment payment on December 31, 2016. (Round amounts to the nearest dollar.)