Question

how do I calculate mortgage payable?

Sav Homework: chapter 1 Score: 0 of 1 pt 8 of 14 (7 complete HW Score: 50%, 7 of 14 Question 8, S12-2 (similar to) Question Help Ela Company purchased a building with a market value of $305,000 and land with a market value of $25,000 on January 1, 2018. Ella Company paid $15,000 cash and signed a 15-year, 12% mortgage payable for the balance. Requirements 1. Journalize the January 1, 2018, purchase. 2. Journalize the first monthly payment of 53,781 on January 31, 2018. (Round to the nearest dollar) Requirement 1. Journalize the January 1, 2018, purchase. (Record debits first, then credits. Select explanations on the last line of the journal entry) Date Accounts and Explanations Debit Credit 2018 Jan Building 305,000 Land 25,000 Mortgage Payable Cash 15,000 Purchased building and land with a mortgage and cash payment NO

Answer 1

Based on the information available in the question, we can calculate the Mortgage Payable as follows:-

Mortgage Payable is the long term obligation of the business that is generally secured by the assets of the business. Morgage Payable with respect to Ella company is calculated as follows:-

Mortgage Payable = Market Value of Land + Market Value of Building - Cash paid

Martgage Payable = $305,000 + $25,000 - $15,000

Mortgage Payable = $315,000

January 1, 2018	Building A/c	305,000
	Land A/c	25,000
	Mortgage Payable		315,000
	Cash A/c		15,000
	(Purchased land and building with mortgage and cash payment)

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