Requirement 1a. In preparation for recording the transactions, prepare: An amort

Question

Requirement 1a. In preparation for recording the transactions, prepare: An amortization schedule for the first 3 months of the mortgage payable issued on

October

1. Round interest calculations to the nearest dollar.

Beginning

Principal

Interest

Total

Ending

Balance

Payment

Expense

Payment

Balance

10/01/2018

11/1/2018

12/1/2018

01/01/2019

Enter any number in the edit fields and then click Check Answer.

Beginning

Principal

Interest

Total

Ending

Balance

Payment

Expense

Payment

Balance

10/01/2018

11/1/2018

12/1/2018

01/01/2019

Oct. 1 1 I 3 15 31 Issued 38,000 shares of $1 par value common stock for cash of $24 per share issued a $320,000, 10-year, 5% mortgage payable for land with an existing store building. Mortgage payments of $4,000 are due on the first day of each month, beginning November 1. The assets had the following market values: Land, $200,000; Building, $120,000 issued a one-year, 8% note payable for $7,200 for store fixtures. The principal and interest are due October 1, 2019 Purchased merchandise inventory on account from Elite Supply for $124,000, terms n/30 Paid $200 for utilities Recorded cash sales for the month of $140,000 plus sales tax of 7%. The cost of the goods sold was $84,000 and estimated warranty payable was 31 31 Nov. 1 3 10 12 15 5% Recorded October payroll and paid employees Accrued employer payroll taxes for October Paid the first mortgage payment. Paid Elite Supply for the merchandise inventory purchased on October 3 Purchased merchandise inventory on account from Elite Supply for $200,000, terms n/30 Purchased 400 shares of treasury stock for $12 per share Paid all liabilities associated with the October 31 payroll

Explanation / Answer

1 november = Interest is calculated as = begining balance for the month * 5%/12 ( for each month)

= 320000* 0.05/12 = 1,333

principal = 4000 - Interest for the month = 4000 - 1333 = 2667

Ending Balance = Beginning Balance - Principa Payment for the month

= 320000 - 2667 = 317333

1 December= Interest is calculated as = begining balance for the month * 5%/12 ( for each month)

= 317333* 0.05/12 = 1,322

principal = 4000 - Interest for the month = 4000 - 1322 = 2678

Ending Balance = Beginning Balance - Principa Payment for the month

= 317333 - 2678 = 314656

1 January = Interest is calculated as = begining balance for the month * 5%/12 ( for each month)

= 314656* 0.05/12 = 1,311

principal = 4000 - Interest for the month = 4000 - 1311 = 2689

Ending Balance = Beginning Balance - Principa Payment for the month

= 314656 - 2689 = 311967

Beginning Balance Principal Payment Interest Expenses Total Payment Ending Balance 10/1/2018 $ 320,000 $ 320,000 11/1/2018 $ 320,000 $    2,667 $    1,333 $    4,000 $ 317,333 12/1/2018 $ 317,333 $    2,678 $    1,322 $    4,000 $ 314,656 1/1/2019 $ 314,656 $    2,689 $    1,311 $    4,000 $ 311,967

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