Using the mortgage schedule in figure 9.6, prepare the journal entry to record the mortgage payment on 31 March 2019.
Reasoning

The difference between the amount borrowed and the amount repaid is interest. The interest component of each repayment is calculated by multiplying the opening balance by the interest rate for the period. The interest should be recorded as an expense. The remainder of the payment should be recorded as a reduction in the principal of the mortgage.

figure 9.6 mortgage schedule

Transcribed Image Text:

Month ending Beginning balance Reduction Payment Interest of principal Closing balance $ $ $ $ $ 31.01.19 106220 5000 1062 3938 102 282 28.02.19 102 282 5000 1023 3977 98 305 31.03.19 98305 5000 983 4017 94 288 30.04.19 94288 5000 943 4057 90231 31.05.19 90231 5000 902 4098 86 133 30.06.19 86 133 5000 861 4139 31.07.19 81994 5000 820 4180 81 994 77814 31.08.19 77814 5000 778 4222 73 592 30.09.19 73592 5000 736 4264 69 328 31.10.19 69328 5000 693 4307 65 021 30.11.19 65 021 5000 650 4350 60671 31.12.19 60671 5000 607 4393 56278 31.01.20 56278 5000 563 4437 51841 28.02.20 51841 5000 518 4482 47 359 31.03.20 47 359 5000 474 4526 42 833 30.04.20 42 833 5000 428 4572 38 261 31.05.20 38261 5000 383 4617 33 644 30.06.20 33644 5000 336 4664 28 980 31.07.20 28980 5000 290 4710 24270 31.08.20 24270 5000 243 4757 19513 30.09.20 19513 5000 195 4805 14 708 31.10.20 14708 5000 147 4853 9855 30.11.20 9855 5000 99 4901 4954 31.12.20 4954 5000 46 4954 0