Problem 15-4A Talkington Electronics issues a $400,000, 8%, 15-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 $59,612. Payments are due on December 31.

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 Balance 400,000

1 59,612

2 59,612

3 59,612

4 59,612

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

Cash 400,000

Mortgage Payable 400,000

Interest Expense

Mortgage Payable

Cash

Show how the total mortgage liability should be reported on the balance sheet at December 31, 2017.

Talkington Electronics Balance Sheet (Partial)

December 31st, 2017

______________

Mortgage Payable $__________

______________

______________ $___________