Brief Exercise 10-19 Tamarisk, Inc. issues a $690,000, 10%, 10-year mortgage not

Question

Brief Exercise 10-19

Tamarisk, Inc. issues a $690,000, 10%, 10-year mortgage note on December 31, 2017, to obtain financing for a new building. The terms provide for annual installment payments of $112,294.

Prepare the entry to record the mortgage loan on December 31, 2017, and the first installment payment on December 31, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Brief Exercise 10-19 Tamarisk, Inc. issues a $690,000, 10%, 10-year mortgage note on December 31, 2017, to obtain financing for a new building. The terms provide for annual installment payments of $112,294 Prepare the entry to record the mortgage loan on December 31, 2017, and the first installment payment on December 31, 2018 (Credit account titles are automatically indented when amount is entered. Do not indent manually. Date Account Titles and Explanation Debit Credit Dec. 31, 2017 Dec. 31, 2018

Explanation / Answer

Dec-31-17 Cash 690000      Notes payable 690000 Dec-31-18 Interest expense 69000 Notes payable 43294          Cash 112294

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