Solution
Date | Account title and explanation | Debit | Credit |
Dec 31, 2022 | Cash | $ 720,000.00 | |
Mortgage payable | $ 720,000.00 | ||
(To record issue of mortgage) | |||
Dec 31, 2023 | Interest expense | $ 72,000.00* | |
Mortgage payable | $ 45,177.00** | ||
Cash | $ 117,177.00 | ||
(To record installment of mortgage payment) |
*Interest expense = $720,000 x 10%
Mortgage reduced = Total installment minus interest portion............(117177-7200= $45177)
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