HEMI took out a mortgage of $150,000,000 on September 1, 2019 to purchase the land and building(noted in the Capital Assets section above). This amount has been recorded in the Mortgage Payable general ledger account. Accountant has recorded the blended interest and principal monthly payments in the Interest Expense general ledger account. You have been provided with the following amortization schedule for the mortgage payable:

Month	Opening balance	Interest expense	Payment	Closing balance
September, 2019	150,000,000	525,000	1,532,976	148,992,024
October, 2019	148,992,024	521,472	1,532,976	147,980,520
November, 2019	147,980,520	517,932	1,532,976	146,965,476
December, 2019	146,965,476	514,379	1,532,976	145,946,879
Total		2,078,783	6,131,904

The Accountant wants you to complete the following:

a. Using the above amortization schedule, calculate the total principal reduction in the 2019 fiscal year (show your calculations).

b. Provide an adjusting journal entry to move the amount you computed in Part (a) above from Interest Expense to reduction in Mortgage Payable.

c. $12,500,000 of mortgage principal will be paid in the next 12 months. Provide an adjusting journal entry to move this amount to Current Portion of Mortgage Payable account.

Answer rating: 100% (QA)

a Total payments made between Sep 2019 Dec 2019 6131904 Total int... View the full answer