Beginning Loan Ending Loan Payment Interest Principal 12,679 12,753 12,827 12,90

Question

Beginning Loan Ending Loan Payment Interest Principal 12,679 12,753 12,827 12,902 Balance Balance Payment1 Payment 2 Payment3 Payment 4 700,000 687,321 674,568 661,741 16,762 16,762 16,762 16,762 4,083 4,009 3,935 3,860 687,321 674,568 661,741 648,839 Prepare the journal entries to record the inception of the loan and the first two monthly payments. (Credit account titles are automatically Indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit May 1 May 31 un. 30

Explanation / Answer

May 1 Cash/bank debit 700,000

   Credit 7% mortgage loan credit 700,000

May 31 debit interest expense 4083

debit 7% mortgage loan 12679

credit cash/bank 16762

june 30 debit interest expense 4009

debit 7% mortgage loan 12753

credit cash/bank 16762

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