In: Accounting
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
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 |