In: Accounting
Jernigan Co. receives €240,000 when it issues a €240,000, 6%, mortgage note payable to finance the construction of a building at December 31, 2020. The terms provide for annual instalment payments of €33,264 on December 31.
instructions
Date | General Journal | Debit | Credit |
Dec 31, 2020 | Cash | 240,000.00 | |
Note Payable | 240,000.00 | ||
April 30, 2021 | Interest Expense | 4,800.00 | |
Interest Payable | 4,800.00 | ||
(240,000 x 6% x 4/12) | |||
Dec 31, 2021 | Interest Expense | 9,600.00 | |
Interest Payable | 4,800.00 | ||
Note Payable | 18,864.00 | ||
Cash | 33,264.00 | ||
April 30, 2022 | Interest Expense | 4,422.72 | |
Interest Payable | 4,422.72 | ||
(240,000 - 18,6=864) x 6% x 4/12) | |||
Dec 31, 2022 | Interest Expense | 8,845.44 | |
Interest Payable | 4,422.72 | ||
Note Payable | 19,995.84 | ||
Cash | 33,264.00 | ||