tpx? 0.6838815648610018.1510692783215 Questions 1-4 fof 10 Save & Exit: Submit P

Question

tpx? 0.6838815648610018.1510692783215 Questions 1-4 fof 10 Save & Exit: Submit Problem 9-1A Record and analyze installment notes (LO9-2) The following information applies to the questions displayed below On January 1, 2018, Gundy Enterprises purchases an office for $360,000, paying $60,000 down and borrowing the remaining $300,000, signing a 7%, 10-year mortgage. Installment payments of $3,483 25 are due at the end of each month, with the first payment due on January 31 2018. Problem 9-1A Record and analyze instalment notes (.09-2) Section Break Required information 100 points Problem 9-1A Part 1 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. 3 5 7

Explanation / Answer

1 31-Jan-18 Interest on mortgage A/c Dr……….. $        1,750.00 ($300000*7%/12 months)                                            To Mortgage A/c $ 1,750.00 (Being interest recorded for 1st month) 31-Jan-18 Mortgage A/c Dr………………..$3483.25                          To Cash / Bank A/c $3,483.25 (Being 1st installment on mortgage paid) 2 Total payment made = $3,483.25 Interest on 1st mortgage ($300000*7%/12 months) = $1,750 Therefore, Payment towards interest = $1,750 Payment towards reducing the carrying value of loan (3483.25-1750)= $1,733.25 3 Total payments = $   417,990.00 Actual payment of loan (Original amount borrowed)= $   300,000.00 Interest expense (417990-300000) = $   117,990.00 Please hit the like button if the answer helped you else leave a comment for further clarification. Thank you! All the best!

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