On January 1, 2015, Gundy Enterprises purchases an office for $228,000, paying $

Question

On January 1, 2015, Gundy Enterprises purchases an office for $228,000, paying $48,000 down and borrowing the remaining $180,000, signing a 8%, 10-year mortgage. Installment payments of $2,183.90 are due at the end of each month, with the first payment due on January 31, 2015 value: 0.71 points Required 1. Record the purchase of the building on January 1, 2015. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to 2 decimal places.) View transaction list Journal entry worksheet Record the purchase of the building. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2015

Explanation / Answer

1) Date General journal Debit Credit 1/1/2015 Buildings 228,000 Cash 48,000 Mortgage payable 180,000 2) Date Cash interest decrease in Carrying paid expense CV value 1/1/2015 180,000 1/31/2015 2,183.90 1200 983.90 179,016.1 2/28/2015 2,183.90 1193.44 990.46 178025.64 3-a) Date General journal Debit Credit 12/31/2015 interest expense 1,200 mortgage payable 983.90 cash 179,016.1 3-b) interest Reduce the expense CV first payment 1,200 983.9 4) Actual payment of loan 118068 interest expense (180000*8%*10) 144000

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