Peyton Co. receives \(\$ 110,000\) when it issues a \(\$ 110,000,10 \%\), mortgage note payable to finance the construction of a building at December 31, 1996. The terms provide for semiannual installment payments of \(\$ 7,500\) on June 30 and December 31.

\section*{Instructions}

Prepare the journal entries to record the mortgage loan and the first two installment payments.