Business, 29.08.2020 05:01 gabigalvis1091

Kellerman Company purchased a building and land with a fair market value of $550,000 (building, $425,000, and land, $125,000) on January 1, 2018. Kellerman signed a 20-year, 6% mortgage payable. Kellerman will make monthly payments of $3,940.37. Round to two decimal places. a. Journalize the mortgage payable issuance on January 1, 2018. Date Credit Debit 425000 15000 Non BUnding 550000 morigage payuple Prepare an amortization schedule for the first two payments. Principal Amortization
b. Carrying Value Cash Interest Date Payment Expense Borrow Date First Pmt Second Pmt
c. Journalize the first payment on January 31, 2018. Date Debit Credit
d. Journalize the second payment on February 28, 2018. Debit Credit Date

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Answer from: makoa

a, Journal Entry

Date Account Title Debit Credit

Jan 1 Building $425,000

Land $125,000

Mortgage payable $550,000

b. Date Interest Cash Principal Carrying

expense payment amortization value

Borrow date $550,000

First payment $2,750 $3,940.37 $1,190.37 $548,809.63

Second payment $2,744.05 $3,940.37 $1,196.32 $547,613.31

Working

First payment date

Interest expenses = 550,000 x 6% x 1/12 = 2,750

Cash payment = 3,940.37

Principal amortization = 3,940.37 - 2,750 = 1,190.37

Carrying value = 550,000 - 1,190.37 = 548,809.63

Second payment date

Interest expenses = 548,809.63 x 6% x 1/12 = 2,744.05

Cash payment = 3,940.37

Principal amortization = 3,940.37 - 2,744.05 = 1,196.32

Carrying value = 548,809.63 - 1,196.32 = 547,613.31

c. Journal

Date Account Title Debit Credit

Jan 31 Mortgage payable $1,190.37

Interest expense $2,750

Cash $ 3,940.37

d . Journal

Date Account Title Debit Credit

Feb 28 Mortgage payable $1,196.32

Interest expense $2,744.05

Cash $3,940.37

Answer from: Quest

d. to get countries or companies to stop doing something objectionable.

Answer from: Quest

Bi would !

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Kellerman Company purchased a building and land with a fair market value of $550,000 (building, $425...

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