Ivanhoe Company receives $385,000 when it issues a $385,000, 8%, mortgage note p

Question

Ivanhoe Company receives $385,000 when it issues a $385,000, 8%, mortgage note payable to finance the construction of a building at December 31, 2017. The terms provide for annual installment payments of $44,979 on December 31. (a) Prepare the schedule using effective-interest method to amortize bond premium or discount of Ivanhoe Company. (Round answers to O decimal places, e.g. 5,275.) Annual Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance Issue date 12/31/18 12/31/19

Explanation / Answer

Annual interest period Cash payment Interest expense Reduction of principal Principal balance Issue date 385000 12/31/18 44979 30800 14179 370821 12/31/19 44979 29666 15313 355508

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