Tucki Co. receives $240,000 when it issues a $240,000, 8%, mortgage note payable

Question

Tucki Co. receives $240,000 when  it issues a $240,000, 8%,  mortgage note payable to finance the construction of a building at December  31, 2014. The terms provide for semiannual installment payments of $17,660 on  June 30 and December 31.

Prepare the journal entries to record the  mortgage loan and the first two installment payments. (Round  answers to 0 decimal places, e.g. 15,250. Credit account titles are  automatically indented when amount is entered. Do not indent manually.)

Date Account  Titles and Explanation Debit Credit Dec. 31, 2014
June 30, 2015

Dec. 31, 2015

Tucki Co. receives $240,000 when it issues a $240,000, 8%, mortgage note payable to finance the construction of a building at December 31, 2014. The terms provide for semiannual installment payments of $17,660 on June 30 and December 31. Prepare the journal entries to record the mortgage loan and the first two installment payments. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Explanation / Answer

Debit:Cash-$240,000 Credit Mortagage Payable-$240000

Interest expenses $9,600 Mortagage payable $8,060 $Cash 17660

Interest Expense $9277.60 Mortgage Payable $8342.40 CAsh $17660

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