Do It! Review 10-6 Detwiler Orchard issues a $689,034, 6%, 15-year mortgage note

Question

Do It! Review 10-6

Detwiler Orchard issues a $689,034, 6%, 15-year mortgage note to obtain needed financing for a new lab. The terms call for semiannual payments of $35,154 each.

Prepare the entries to record the mortgage loan and the first installment payment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 8,970.)

Account Titles and Explanation

Debit

Credit

(To record mortgage loan)

(To record semiannual payment on mortgage)

Account Titles and Explanation

Debit

Credit

(To record mortgage loan)

(To record semiannual payment on mortgage)

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Cash 689034 Mortgage loan 689034 (To record mortgage loan) Mortgage loan 14483 Interest expense (689034*6%*6/12) 20671 Cash 35154 (To record semiannual payment on mortgage)

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