Nankin Electronics issues a ($ 900,000,10 %, 10)-year mortgage note on December 31, 1995 , to help
Question:
Nankin Electronics issues a \(\$ 900,000,10 \%, 10\)-year mortgage note on December 31, 1995 , to help finance a plant expansion program. The terms provide for semiannual installment payments, not including real estate taxes and insurance of \(\$ 72,218\). Payments are due June 30 and December 31 .
\section*{Instructions}
(a) Prepare an installment payments schedule for the first 2 years.
(b) Prepare the entries for (1) the mortgage loan and (2) the first two installment payments.
(c) Show how the total mortgage liability should be reported on the balance sheet at Prepare journal entries to record issuance of bonds, payment of interest, and using effective-interest method (SO 9) December 31, 1996.
Step by Step Answer:
Financial Accounting
ISBN: 9780471169208
2nd Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso