Question

Can I have a little assistance, please! Much appreciated!

Problem 10-12A Laverne purchased a new piece of equipment to be used in its new facility. The $420,000 piece of equipment was purchased with a $63,000 down payment and with cash received through the issuance of a $357,000, 7%, S-year mortgage payable issued on January 1, 2017. The terms provide for annual installment payments of $87,069 on December 31. Your answer is partially correct. Try again. Prepare an installment payments schedule for the first five payments of the notes payable. (Round answers to 0 decimal places, e.g. 125.) Annual Cash Payment Reduction of PrincipalBalance Principal Interest Expense Interest Period P Issue Date 357000 87069 24990 62079 294921 87069 20645 66425 87069 15995 71074 157422 87069 11020 6050 81373 87069 5696 Amount may be off due to rounding. SHOW LIST OF ACCOUNTS Your answer is partially correct. Try again. Prepare the journal entry related to the notes payable for December 31, 2017. (Round answers to 0 decimal places,e.g.125. Credit account titles are automatically indented when amount is entered. Do not indent manually Date Account Titles and Explanation Debit Credit Dec. 31 Mortgage Payable Interest Expense

Answer 1

1
		(a)	(b)	(c)	(d)
	Period	Cash Payment	Interest Expense (effective interest rate = 7%)	Principal Reduction	Balance
			[Previous year balance X 7%]	(a) - (b)	[Previous year balance - (c)]
	Issue Date				$                                      3,57,000
	1	$                                               87,069	$                24,990	$                        62,079	$                                      2,94,921
	2	$                                               87,069	$                20,645	$                        66,425	$                                      2,28,496
	3	$                                               87,069	$                15,995	$                        71,074	$                                      1,57,422
	4	$                                               87,069	$                11,020	$                        76,050	$                                          81,373
	5	$                                               87,069	$                   5,696	$                        81,373	$                                                    0	*
2	Date	Account Titles and Explanation	Debit	Credit
	Dec-31	Mortgage Payable	$                62,079
		Interest Expense	$                24,990
		Cash		$                        87,069
3		Laverne
		Balance sheet (Partial)
		December 31, 2017
		Current Liabilities:
		Current Mortgage Payable	$                66,425
		Long Term Liabilities:
		Mortgage Payable	$             2,28,496
		Total Liabilities	$             2,94,921