Homework Answers
1)
Total payment = $26602
interest = 550000 × 8% × 6/12 = $22000
Principal payment = 26602 - 22000 = $4602
Loan balance = $550000 - $4602 = $545398
2)Journal entries
a) warehouse a/c dr. 550000
To mortgage loan a/c. 550000
b) loan a/c dr. 4602
Interest a/c dr. 22000
To. Bank a/c. 26602
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