Problem 10-5A (Part Level Submission)

Talkington Electronics issues a $373,000, 6%, 10-year mortgage note on December 31, 2016. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provide for annual installment payments, exclusive of real estate taxes and insurance, of $50,679. Payments are due on December 31.

(a)

Prepare an installment payments schedule for the first 4 years. (Round answers to 0 decimal places, e.g. 15,250.)

Annual Interest Period

Cash Payment

Interest Expense

Reduction of Principal

Principal Balance

Issue Date _______________

1 ____________ _______________ ______________ ________________ __________________

2 _____________- _______________ ________________- _________________-- ___________________-

3 ________________ ________________ ________________ ___________________ ______________________

4 _________________ ____________- ________________ ___________________ __________________________

b) prepare the entries for (1) the loan and (2) the first installment payment.

c) show how the total mortagage liability should be reported on the balance sheet at december 31,2017.