Exercise 10-13 Jernigan Co. receives $264,000 when it issues a $264,000, 10%, mo

Question

Exercise 10-13 Jernigan Co. receives $264,000 when it issues a $264,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2017, The terms provide for annual installment payments of $44,000 on December 31 Prepare the journal entries to record the mortgage loan and the first two payments. (Round answers to O decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2018 Dec. 31, 2019

Explanation / Answer

Dec-31-17 Cash 264000         Notes Payable 264000 Dec-31-18 Interest Expense 26400 =264000*10% Notes Payable 17600        Cash 44000 Dec-31-19 Interest Expense 24640 =(264000-17600)*10% Notes Payable 19360        Cash 44000

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