12 –Khamis Electronics issues a $700,000, 10-year, 7% mortgage note payable on December 31, 2020, to help finance a plant expansion. The terms of the note provide for semi-annual blended payments of $49,253. Payments are due on June 30 and December 31. Instructions

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Q 12 –Khamis Electronics issues a $700,000, 10-year, 7% mortgage note payable on December
31, 2020, to help finance a plant expansion. The terms of the note provide for semi-annual
blended payments of $49,253. Payments are due on June 30 and December 31.
Instructions
4
(a). Prepare an instalment payment schedule for the first two years. Round all
calculations to the nearest dollar.
(b). Prepare the entries for (1) the loan and (2) the first two instalment payments on June
30, 2021, and December 31, 2021.
(c). Show how the total mortgage liability should be reported on the balance sheet at
December 31, 2021.
Transcribed Image Text:Q 12 –Khamis Electronics issues a $700,000, 10-year, 7% mortgage note payable on December 31, 2020, to help finance a plant expansion. The terms of the note provide for semi-annual blended payments of $49,253. Payments are due on June 30 and December 31. Instructions 4 (a). Prepare an instalment payment schedule for the first two years. Round all calculations to the nearest dollar. (b). Prepare the entries for (1) the loan and (2) the first two instalment payments on June 30, 2021, and December 31, 2021. (c). Show how the total mortgage liability should be reported on the balance sheet at December 31, 2021.
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