Accounting Question #1 Famzy Corp. borrowed $600,000 in the form of a mortgage on February 1, 2022, to purchase a large building. The mortgage rate is 6% and the term is 20 years, and semi-annual payments of $26,500 are made on February 1 and August 1. The company has a December 31 year-end. Required: Record the following journal entries for Famzy Corp. (explanations are not required): a) Establishment of the mortgage on February 1, 2022. b) First interest payment on August 1, 2022. c) Accrual of interest at December 31, 2022. (Current portion set-up NOT required) d) Second interest payment on February 1, 2023.
Accounting Question #1 Famzy Corp. borrowed $600,000 in the form of a mortgage on February 1, 2022, to purchase a large building. The mortgage rate is 6% and the term is 20 years, and semi-annual payments of $26,500 are made on February 1 and August 1. The company has a December 31 year-end. Required: Record the following journal entries for Famzy Corp. (explanations are not required): a) Establishment of the mortgage on February 1, 2022. b) First interest payment on August 1, 2022. c) Accrual of interest at December 31, 2022. (Current portion set-up NOT required) d) Second interest payment on February 1, 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question #1 Famzy Corp. borrowed $600,000 in the form of a mortgage on February 1, 2022, to purchase a large building. The mortgage rate is 6% and the term is 20 years, and semi-annual payments of $26,500 are made on February 1 and August 1. The company has a December 31 year-end. Required: Record the following
a) Establishment of the mortgage on February 1, 2022.
b) First interest payment on August 1, 2022.
c) Accrual of interest at December 31, 2022. (Current portion set-up NOT required)
d) Second interest payment on February 1, 2023.
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