Pad 7:05 PM ?95%- On January 1, 2018, Gundy Enterprises purchases an office for

Question

Pad 7:05 PM ?95%- On January 1, 2018, Gundy Enterprises purchases an office for $327,000, paying $57,000 down and borrowing the remaining $270,000, signing a 7%, 10-year mortgage. Installment payments of $3134.93 are due at the end of each month, with the first payment due on January 31, 2018. value 10.00 points Required information Required: 1. Record the purchase of the building on January 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet Record the purchase of the building. Note: Enter debits before credits Date General Journal Debit Credit January 01, 2018

Explanation / Answer

Req 1: Journal entry; Building Account Dr. 327,000      Cash Account 57,000      7% 10-yr Mortgage Payable 270,000 Req 2: Amort Schedule Date cash paid Interest Decrease in Carrying Carrying Value Amount 01.1.2018 270000 01.31.18 3134.93 1575 1559.93 268440.1 02.28.2018 3134.93 1566 1568.93 266871.1 03.31.2018 3134.93 1557 1577.93 265293.2 Req 3: Jan 31 2018 Interest expense Dr. 1575 7% 10-yr Mortgage Payabe Dr. 1559.93        Cash Aacount 3134.93 Req 4: Total amount paid (3134.93*120 periods) 376191.6 Less: loan amount 270000 Interest expense 106191.6

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