Keel Company purchased a building and land with a fair market value of $650,000 (building, $550,000, and land, $100,000) on January 1, 2016. Keel signed a 20-year, 8% mortgage payable. Keel will make monthly payments of $5,436.86.
Requirements
1. Journalize the mortgage payable issuance on January 1, 2016 (explanations are not required).
2. Prepare an amortization schedule for the first two payments.
3. Journalize the first payment on January 31, 2016 (round to two decimal places).
4. Journalize the second payment on February 29, 2016 (round to two decimal places).