Glen Pool Club, Inc., has a $150,000 mortgage liability. The mortgage is payable

Question

Glen Pool Club, Inc., has a $150,000 mortgage liability. The mortgage is payable in monthly installments of $1,825, which include interest computed at an annual rate of 12 percent (1 percent monthly).

    

Prepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the mortgage’s unpaid balance. (Round your answers to the nearest dollar amount. Enter all amounts as positive numbers.)

Prepare the journal entry to record the second monthly payment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Glen Pool Club, Inc., has a $150,000 mortgage liability. The mortgage is payable in monthly installments of $1,825, which include interest computed at an annual rate of 12 percent (1 percent monthly).

Explanation / Answer

Journal entry :

Interest expense 1500

Loan A/c 325

To Cash 1825

monthly interest period Sl.No Monthly payment interest expense reduction in unpaid bal unpaid balance original balance 1 1825 1500 325 149675 2 1825 1500 325 149350

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