Question

Exercise 10-5 La Porte Company obtained a 10-year, 5%, $164,000 mortgage loan to finance the purchase of a warehouse at March 31, 2017. The terms provide for semi-annual instalment payments on September 30 and March 31 Record the obtaining of the mortgage payable on March 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Date Debit Credit Mar. 31 SHOW LIST OF ACCOUNTS LINK TO TЕXT Record the first two instalment payments on September 30, 2017, and March 31, 2018, assuming the payment is (1) a fixed principal payment of $8,200 plus interest, and (2) a blended principal and interest payment of $10,520. (Round answers to the nearest whole dollar, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) (1) Flxed principal payment Account Titles and Explanation Payment Date Debit Credit September 30 First Instalment Second Instalment Mar. 31

Answer 1

		Debit	Credit
Mar 31	Cash	164000
	Mortgage loan payable		164000
	(1)Fixed principal and interest
		Debit	Credit
September 30	Interest expense	4100		=164000*5%*6/12
	Mortgage loan payable	8200
	Cash		12300
Mar 31	Interest expense	3895		=(164000-8200)*5%*6/12
	Mortgage loan payable	8200
	Cash		12095
	(2)Blended principal and interest
		Debit	Credit
September 30	Interest expense	4100		=164000*5%*6/12
	Mortgage loan payable	6420
	Cash		10520
Mar 31	Interest expense	3940		=(164000-6420)*5%*6/12
	Mortgage loan payable	6580
	Cash		10520