Question

On November 15, 2015, Bachman Manufacturing Company signed a 30-year, $200,000 mortgage note payable to Williamsburg...

On November 15, 2015, Bachman Manufacturing Company signed a 30-year, $200,000 mortgage note payable to Williamsburg in connection with the purchase of a building. The note calls for interest at an annual rate of 6 percent (0.5 percent per month). The note is fully amortizing over a period of 360 months. A small portion of the amortization table showing the allocation of monthly payments between interest and principal is illustrated as follows.

Installment Notes Question 1: Prepare the journal entry to record the issuance of the note on November 15.

Account Name

Debit ($)

Credit ($)

Dr.

  

Cr.

  

  

Installment Notes Question 2: Prepare the journal entry to record the first monthly payment on December 15.

Enter the debit for the higher dollar amount first.

Account Name

Debit ($)

Credit ($)

Dr.

  

Dr.

  

Cr.

  

Installment Notes Question 3: Prepare the adjusting entry to record one half month's accrued interest on December 31.
Round to the nearest dollar

Account Name

Debit ($)

Credit ($)

Dr.

  

Cr.

  

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