Question

In: Accounting

Rouxdy Co. purchased a building that cost $450,000. They paid 10% and signed a 15 –...

Rouxdy Co. purchased a building that cost $450,000. They paid 10% and signed a 15 – year, 6%, mortgage payable for the remainder.

a. Journalize the issuance of the mortgage payable

b. Journalize the first monthly payment of $3,417.62

Solutions

Expert Solution

No. Account Titles Debit Credit
a. Building $450,000
Cash ($450,000 x 10%) $45,000
Mortgage payable ($450000 - 45000) $415,000
b. Interest Expense (415000 x 6% x 1/12) $2,075
Mortgage payable ($3,417.62 - 2075) $1,342.62
Cash $3,417.62

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