Question

Cullumber Company receives S385,000 when it issues a $385,000, 5%, mortgage note payable to finance the construction of a building at December 31, 2017·The terms provide for annual istallment payments of $37,092 on December 31. Prepare an amortization schedule of a mortgage note for two years. (Round answers to 0 decimal places, e.g. 5,275.) Annual Interest Period Paymentxpenseof Principal Balance Cash Interest Principal Issue date 12/31/18 12/31/19 SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEO SKILAR EXERCİSE Prepare the journal entry to record the mortgage loan. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dac. 31, 2017 SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEOI STMTILAR EXERCISE Prepare the journal entries to record the first two installment payments. (Round answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. Date Account Titles and Explanation Debit Credit First Installment Payment Dec. 31, 2018 Second Installment Payment Dec. 31, 2019

Answer 1

		Annual interest period	Cash payment	Interest expense	Reduction of principal	Principal balance
		Issue date				385000
		31-12-2018	37092	19250	17842	367158
		31-12-2019	37092	18358	18734	348424
31-12-2017	Cash	385000
	Mortgage notes payable		385000
31-12-2018	Interest expense	19250
	Mortgage interest payable	17842
	Cash		37092
31-12-2019	Interest expense	18358
	Mortgage interest payable	18734
	Cash		37092