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Installment Term Loan On December 31, 2017, Eppel, Inc. borrowed $900,000 on an eight per-cent, 15-year...

Installment Term Loan On December 31, 2017, Eppel, Inc. borrowed $900,000 on an eight per-cent, 15-year mortgage note payable. The note is to be repaid in equal semiannual installments of $52,047 (payable on June 30 and December 31). Prepare journal entries to reflect (a) the issuance of the mortgage note payable, (b) the payment of the first installment on June 30, 2018, and (c) the payment of the second installment on December 31, 2018. Round amounts to the nearest dollar.

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Answer #1
No. Date General Journal Debit Credit
a. Dec. 31, 2017 Cash 900000
Mortgage note payable 900000
(To record issuance of the mortgage note payable)
b. June 30, 2018 Interest expense ($900000 x 8% x 6/12) 36000
Mortgage note payable 16047
Cash 52047
(To record the payment of the first installment)
c. Dec. 31, 2018 Interest expense [($900000 - $16047) x 8% x 6/12)] 35358
Mortgage note payable 16689
Cash 52047
(To record the payment of the second installment)
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