Teal Mountain Construction Inc. needed financing to buy two Case graders. Teal Mountain receives $240,000 on January 1, 2022, when it issues a 5-year, 5% mortgage note payable. The terms provide for semi-annual instalment payments on July 1 and January 1, with fixed principal amounts.

Calculate the fixed principal amount required each six-month period.

Fixed principal portion

$

Question Part Score

--/1

Prepare an instalment payment schedule for the first three interest periods.

TEAL MOUNTAIN CONSTRUCTION INC. Instalment Payment Schedule - Fixed Principal Payments
Interest Period		Cash Payment		Interest Expense		Reduction of Principal		Principal Balance
Jan. 1, 2022		$		$		$		$
July 1, 2022
Jan. 1, 2023
July 1, 2023

Question Part Score

--/6

Prepare the journal entries to record the mortgage note payable and the first three instalment payments. Prepare any necessary adjusting entries at Teal Mountain's December 31, 2022 year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1, 2022
July 1, 2022
Dec. 31, 2022
Jan. 1, 2023
July 1, 2023

Question Part Score

--/13

Provide the balance sheet disclosure for the mortgage note payable at December 31, 2022, being specific about the classifications.

TEAL MOUNTAIN CONSTRUCTION INC. Balance Sheet (Partial) December 31, 2022
Total Current LiabilitiesNon-Current LiabilitiesTotal AssetsTotal Property, Plant and EquipmentShort-Term InvestmentsProperty, Plant and EquipmentTotal Shareholders' EquityCurrent AssetsTotal Current AssetsLong-Term InvestmentsShareholders' EquityCurrent LiabilitiesTotal Non-Current LiabilitiesTotal Liabilities and Shareholders' Equity
Current Portion of Mortgage PayableMortgage Note PayableCashInterest ExpenseInterest Payable		$
Interest ExpenseCurrent Portion of Mortgage PayableMortgage Note PayableCashInterest Payable
Current AssetsTotal Property, Plant and EquipmentNon-Current LiabilitiesTotal Current AssetsShort-Term InvestmentsTotal AssetsTotal Non-Current LiabilitiesTotal Liabilities and Shareholders' EquityTotal Current LiabilitiesTotal Shareholders' EquityLong-Term InvestmentsProperty, Plant and EquipmentCurrent LiabilitiesShareholders' Equity
Current Portion of Mortgage PayableMortgage Note PayableInterest ExpenseInterest PayableCash		$