A company takes out a four-year, $3,040,000 mortgage on May 1. The interest rate on the...
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A company takes out a four-year, $3,040,000 mortgage on May 1. The interest rate on the loan is 4% per year, and blended payments of $68,640 (including both interest and principal) are to be made at the end of each month. The following is an extract from the loan amortization table the bank provided the company: Payment 1 Payment 2 Payment 3 Payment 4 Beginning Loan Balance $3,040,000 2,981,493 2,922,791 2,863,894 May 1 Payment Interest $68,640 $10,133 68,640 9,938 68,640 9,743 68,640 9,546 Date Account Titles and Explanation May 31 (b) Prepare the journal entries to record the inception of the loan and the first two monthly payments. Ignore year-end accruals of interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts.) Principal $58,507 58,702 58,897 59,094 (To record the inception of the mortgage) Ending Loan Balance $2,981,493 2,922,791 2,863,894 2,804,800 Debit Credit A company takes out a four-year, $3,040,000 mortgage on May 1. The interest rate on the loan is 4% per year, and blended payments of $68,640 (including both interest and principal) are to be made at the end of each month. The following is an extract from the loan amortization table the bank provided the company: Payment 1 Payment 2 Payment 3 Payment 4 Beginning Loan Balance $3,040,000 2,981,493 2,922,791 2,863,894 May 1 Payment Interest $68,640 $10,133 68,640 9,938 68,640 9,743 68,640 9,546 Date Account Titles and Explanation May 31 (b) Prepare the journal entries to record the inception of the loan and the first two monthly payments. Ignore year-end accruals of interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts.) Principal $58,507 58,702 58,897 59,094 (To record the inception of the mortgage) Ending Loan Balance $2,981,493 2,922,791 2,863,894 2,804,800 Debit Credit
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Related Book For
Understanding Financial Accounting
ISBN: 978-1118849385
1st Canadian Edition
Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald
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