Question

Brief Exercise 10-9 Meche Inc. signs a 10-year, 4 %, $270,000 mortgage payable on November 30, 2017, to obtain financing for a new equipment. The terms provide for payments at the end of each month. Prepare the entries to record the mortgage on November 30, 2017, and the first two payments on December 31, 2017, and January 31, 2018, assuming the payment is (a) a fixed principal payment of $2,250, plus interest, and (b) a blended principal and interest payment of #2,724. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to the nearest whole dollar, e.g. 5,275.) (a) Fixed principal payment Date Account Titles and Explanation Debit Credit 2017 Dec. 31 || 2018 1בn. 3 (b) Blanded princlpal and Interest payment Date Account Titles and Explanaton Debit Credit 2017 Dec. 31 2018 Jan. 31

Answer 1

The answer is attached in below picture. Please refer

Thanks

JOURNAL ENTRIES IN THE BOOKS OF MECHE INC Date Particulars Debit 30-Nov-17 Equipment / PPE $ 270,000 Credit 1. Computation of Mortgage Payment Schedule - Fixed Principal Payment (2 Months) Interest @ 4% p.a Payment Opening Closing or Principal Interest Total Date Balance Balance (4%* 1/12 )p.m Payment Payment Payment A = Prev 'F' B=A*0.33% C D=B E=C+D E=A+B-E 30-Nov-17 $ - $ - $ - $ - $ 270,000 31-Dec-17 $ 270,000 $ 900 $ 2,250 $ 900$ 3,150 $ 267,750 31-Jan-18 $ 267,750 $ 893 $ 2,250 $ 893 $ 3,143 $265,500 $ 270,000 $ $ 2,250 900 $ 3,150 To 4% Mortgage Payable (No record mortgage liability) 31-Dec-17 4% Mortgage Payable Interest Expenses To Cash (To record payment of mortgage fixed installment of principal with interest) 31-Jan-18 4% Mortgage Payable Interest Expenses To Cash (To record payment of mortgage fixed installment of principal with interest) $ $ 2,250 893 $ 3,143 Credit 2. Computation of Mortgage Payment Schedule - Blended Principal & Interest Payment(2 Months) Opening Interest @4% p.a Payment Closing Date 1 Balance or Total Payment Interest Principal Balance A = Prev 'F' B=A*0.33% C DEBE =C- D E =A+B-C 30-Nov-17 $ - $ - $ - $ - $ - $ 270,000 31-Dec-17 $ 270,000 $ 900 $ 2,734 $ 900 $ 1,834 $ 268,166 31-Jan-18 $ 268,166 $ 894 $ 2,734 $ 894 $ 1,840 $ 267,220 $ 270,000 JOURNAL ENTRIES IN THE BOOKS OF MECHE INC Date Particulars Debit 30-Nov-17 Equipment / PPE $ 270,000 To 4% Mortgage Payable (No record mortgage liability) 31-Dec-17 4% Mortgage Payable $ 1,834 Interest Expenses $ 900 To Cash (To record payment of mortgage fixed installment of principal with interest) 31-Jan-18 4% Mortgage Payable $ 1,840 Interest Expenses $ 894 To Cash (To record payment of mortgage fixed installment of principal with interest) $ 2,734 $ 2,734