lucky company borrowed 1000000 ignment Additional Exercise 278 Lucky Company bor

Question

lucky company borrowed 1000000 ignment Additional Exercise 278 Lucky Company borrowed $1,000,000 on December 31, 2017, by issuing s 1,000.00. 8% mortgage note payable. The tems ca·for a nual installer payments of $150,000 on December 31 Prepare the journal entries to record the mortgage loan and the first two installment pa account titles and enter o for the amounts.) yments. (Round answers to o decimal places, e.g. 15,250. Cred automatically Indented when amount is entered. Do not indent manually. If no entry is requlred, select No Entry for the Credit Date Account Titles and Explanation Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Indicate the amount of mortgage note payable to be reported as a current liability and as a long-term liability at December 31, 2019 (Round answers to 1 Reserved. A Division of Jobn Wiley & Sons Inc.

Explanation / Answer

a Date General Journal Debit Credit Dec 31 2017 Cash 1000000 Mortagage Payable 1000000 b Dec 31 2018 Interest Expense 8%*1000000 80000 Mortagage Payable 70000 Cash 150000 c Dec 31 2019 Interest Expense 8%*(1000000-70000) 74400 Mortagage Payable 75600 Cash 150000

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