ABC receives 500000 dollar on december 31, 2019 when it issue a 10 year 6% mortgage...

ABC receives 500000 dollar on december 31, 2019 when it issue a 10 year 6% mortgage note payable to finance the construction of a building. the terms provide for monthly installement paymenets.

prepare a journal entries required for the first 2 installment payment on january 31, 2020 and febuary 29, 2020. if the blended monthly payment is $4861.

Expert Solution

	Repayment Schedule

	Outstanding principal	Principal	Interest	Installment

Jan	500,000	2,361	2,500	4,861

Feb	497,639	2,373	2,488	4,861

	Journal Entries


S.No	Journal	Debit ($)	Credit ($)

31-Dec	Cash	500,000
	6% Mortgage Note payable		500,000
	( Being amt borrowed )

31-Jan	6% Mortgage Note payable	2,361
	Interest Expense	2,500
	Cash		4,861
	( Being installment paid )

29-Feb	6% Mortgage Note payable	2,373
	Interest Expense	2,488
	Cash		4,861
	( Being installment paid )

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