Question

More Info 2018 Mar. 1 Borrowed $525,000 from Naples Bank. The 15-year, 5% note requires payments due annually, on March 1 . Each payment consists of $35,000 principal plus one years interest. Mortgaged the warehouse for $150,000 cash with Sandi Bank. The mortgage requires monthly payments of $2,000. The interest rate on the note is 6% and accrues monthly. The first payment is due on January 1, 2019. Recorded interest accrued on the Sandi Bank note. Recorded interest accrued on the Naples Bank note. Dec. 1 31 31 2019 Jan. 1 Feb. 1 Mar. 1 1 Paid Sandi Bank monthly mortgage payment. Paid Sandi Bank monthly mortgage payment. Paid Sandi Bank monthly mortgage payment. Paid first installment on note due to Naples Bank. Print Done

Answer 1

1	Date	Account titles and explanation				Debit	Credit
	2018
	Mar 1.	Cash				525000
		Notes payable					525000
		(Borrowed cash for notes issued)
	Dec 1.	Cash				150000
		Mortgage payable					150000
		(Borrowed cash by mortgage)
	Dec 31.	Interest expense		(150000*6%*1/12)		750
		Interest payable					750
		(Interest accrued on mortgage for 1 month)
	Dec 31.	Interest expense		(525000*5%*10/12)		21875
		Interest payable					21875
		(Interest accrued on notes for 10 month)
	2019
	Jan 1.	Mortgage payable			(2000-750)	1250
		Interest payable				750
		Cash					2000
		(Monthly mortgage paid)
	Feb 1.	Mortgage payable			(2000-744)	1256
		Interest expense		(150000-1250)*6%*1/12		744
		Cash					2000
		(Monthly mortgage paid)
	Mar 1.	Mortgage payable			(2000-737)	1263
		Interest expense		(150000-1250-1256)*6%*1/12		737
		Cash					2000
		(Monthly mortgage paid)
	Mar 1.	Interest payable				21875
		Interest expense		(525000*5%*2/12)		4375
		Notes payable				35000
		Cash					61250
		(Paid first instalment on notes)
2	Date	Beginning balance	Principal repayment	Interest expense	Total payment	Ending balance
		a	b=d-c	c=a*6%*1/12	d	e=a-b
	12-01-18					150000
	01-01-19	150000	1250	750	2000	148750
	02-01-19	148750	1256	744	2000	147494
	03-01-19	147494	1263	737	2000	146231
	04-01-19	146231	1269	731	2000	144962
	05-01-19	144962	1275	725	2000	143687
	06-01-19	143687	1282	718	2000	142406
	07-01-19	142406	1288	712	2000	141118
	08-01-19	141118	1294	706	2000	139823
	09-01-19	139823	1301	699	2000	138522
	10-01-19	138522	1307	693	2000	137215
	11-01-19	137215	1314	686	2000	135901
	12-01-19	135901	1320	680	2000	134581
	01-01-20	134581	1327	673	2000	133253
	02-01-20	133253	1334	666	2000	131920
	03-01-20	131920	1340	660	2000	130579
			Liabilities section of the balance sheet
			March 1,2019
	Current liabilities:					$	$
	Current portion of notes payable					35000
	Current portion of mortgage payable				(Refer table)
	(Total principal repayment for the year 2019)				(Apr 19 to Mar 20)	15652
	Total current liabilities						50652
	Long-term liabilities:
	Notes payable		(525000-35000-35000)			455000
	Mortgage payable		(146231-15652)			130579
	Total long-term liabilities						585579
	Total liabilities						636231