Ste. Anne Corp. obtained a 10-year, 5%, $123,000 mortgage loan to finance the purchase of a building at December 31, 2017. The terms provide for semi-annual instalment
payments on June 30 and December 31.
(a)
Your answer is correct.
Record the obtaining of the mortgage payable on December 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date Account Titles and Explanation
Debit
Credit
Dec. 31
Cash
123,000
Mortgage Payable
123,000
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(b)
Your answer is partially correct.
Record the first two instalment payments on June 30, 2018, and December 31, 2018, assuming the payment is (1) a fixed principal payment of $6,150 plus interest, and
(2) a blended principal and interest payment of $7,890. (Round answers to the nearest whole dollar, e.g. 5,275. Credit account titles are automatically indented when the
amount is entered. Do not indent manually.)
(1) Fixed principal payment
Payment
Date Account Titles and Explanation
Debit
Credit
First Instalment
June 30
Interest Expense
3,075
Mortgage Payable
6,150
Cash
9,225
Second Instalment Dec. 31
Interest Expense
Mortgage Payable
6,150
Cash
(2) Blended principal and interest payment
Payment
Date Account Titles and Explanation
Debit
Credit
First Instalment
June 30
Interest Expense
3,075
Mortgage Payable
7,890
Cash
10,965
Second Instalment Dec. 31
Interest Expense
Mortgage Payable
Cash
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