Glen Pool Club, Inc., has a $144,000 mortgage liability. The mortgage is payable

Question

Glen Pool Club, Inc., has a $144,000 mortgage liability. The mortgage is payable in monthly installments of $1,481, which include interest computed at an annual rate of 12 percent (1 percent monthly). a. 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.) b. 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.)

Explanation / Answer

Answer (A) Partial amortiazation Table

Answer- B Journal Entry for IInd monthly installment.

Account Name Debit Credit

Interest Paid 1439.59

Mortgage Loan paid 41.41

To Cash 1481.00

Sl. no. Principal (A) Installment (B) Interest Paid C=A*12/1200 Principal paid D = B-C Principal balance E= A-D 1 144000.00 1481.00 1440.00 41.00 143959.00 2 143959.00 1481.00 1439.59 41.41 143917.59

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