Question: Ehrlich Electronics issues a $500,000, 8%, 10-year mortgage note on December 31, 2020, to help finance a plant expansion program. The terms of the note

Ehrlich Electronics issues a $500,000, 8%, 10-year mortgage note on December 31, 2020, to help finance a plant expansion program. The terms of the note provide for annual installment payments of $89,418. Payments are due on each December 31.

Instructions

(a) Prepare an installment payments schedule for the first 4 years.

(b) Prepare the entries for (1) the loan and (2) the first and second installment payments.

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