Question

On January 1, 2021, Beaver Tours financed the purchase of a new building by borrowing $600,000 from the bank using a 30-year, 6% note payable. Payments of $3,597.30 are due at the end of each month, with the first installment due on January 31, 2021. Record the issuance of the note payable and the first monthly payment. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round your intermediate calculations. Round your final answers to 2 decimal places.)

Answer 1

Date	General Journal	Debit	Credit
Jan 1, 2021	Building	$600,000
	Note payable		$600,000
	( To record issuance of note payable)
Jan 31, 2021	Note payable	$597.30
	Interest expense	$3,000
	Cash		$3,597.30
	( To record fist installment)

Interest expense on January 31, 2021 = 600,000 x 6% x 1/12

= $3,000

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