Analyzing and Reporting Financial Statement Effects of Mortgages On January 1, Patterson Inc. borrowed $2,000,000 on a 10%, 15-year mortgage note payable. The note is to be repaid in equal semiannual installments of $130,102 (payable on June 30 and December 31). Each mortgage payment includes principal and interest. Interest is computed using the effective interest method. Indicate the financial statement effects using the template for (a) issuance of the mortgage note payable, (b) payment of the first installment on June 30, and (c) payment of the second installment on December 31. Note: For each account category, indicate the appropriate account name. Enter "N/A" for any account category that is not used for a given transaction. Note: Indicate a decrease in an account category by including a negative sign with the amount. Note: Round your answers to the nearest whole dollar. Transaction Check Cash Asset Noncash Assets Balance Sheet Liabilities Contrib. Capital Earned Capital Income St Revenues 2,000,000 2,000,000 Cash N/A ✰ Long term debt N/A N/A N/A N/A (130,102) (30,102) 10 (100,000)✓ Cash N/A Long term debt N/A Retained earnings N/A Interest (130,102)✓ 0~ (161,709.1) x く 0 x 0~ Cash N/A Long term debt N/A Retained earnings N/A = Interest
Analyzing and Reporting Financial Statement Effects of Mortgages On January 1, Patterson Inc. borrowed $2,000,000 on a 10%, 15-year mortgage note payable. The note is to be repaid in equal semiannual installments of $130,102 (payable on June 30 and December 31). Each mortgage payment includes principal and interest. Interest is computed using the effective interest method. Indicate the financial statement effects using the template for (a) issuance of the mortgage note payable, (b) payment of the first installment on June 30, and (c) payment of the second installment on December 31. Note: For each account category, indicate the appropriate account name. Enter "N/A" for any account category that is not used for a given transaction. Note: Indicate a decrease in an account category by including a negative sign with the amount. Note: Round your answers to the nearest whole dollar. Transaction Check Cash Asset Noncash Assets Balance Sheet Liabilities Contrib. Capital Earned Capital Income St Revenues 2,000,000 2,000,000 Cash N/A ✰ Long term debt N/A N/A N/A N/A (130,102) (30,102) 10 (100,000)✓ Cash N/A Long term debt N/A Retained earnings N/A Interest (130,102)✓ 0~ (161,709.1) x く 0 x 0~ Cash N/A Long term debt N/A Retained earnings N/A = Interest
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I am stuck on question c
Transcribed Image Text:Analyzing and Reporting Financial Statement Effects of Mortgages
On January 1, Patterson Inc. borrowed $2,000,000 on a 10%, 15-year mortgage note payable. The note is to be repaid in equal semiannual installments of $130,102 (payable on June 30 and
December 31). Each mortgage payment includes principal and interest. Interest is computed using the effective interest method. Indicate the financial statement effects using the template for (a)
issuance of the mortgage note payable, (b) payment of the first installment on June 30, and (c) payment of the second installment on December 31.
Note: For each account category, indicate the appropriate account name. Enter "N/A" for any account category that is not used for a given transaction.
Note: Indicate a decrease in an account category by including a negative sign with the amount.
Note: Round your answers to the nearest whole dollar.
Transaction
Cash Asset
Noncash Assets
Balance Sheet
Liabilities
Contrib. Capital
Earned Capital
a.
2,000,000
0
2,000,000
Cash
N/A
Long term debt
N/A
N/A
N/A
b.
(130,102)
0
(30,102)
0✓
(100,000)
Cashi
N/A
Long term debt
N/A
Retained earnings
N/A
C.
(130,102)
0✓
(161,709.1) x
0✓
0 x
Cash
N/A
Long term debt
N/A
Retained earnings
# N/A
Check
Income St
Revenues
N/A
0
Interest
Interest
Noncash Assets
Balance Sheet
Liabilities
Contrib. Capital
Earned Capital
Income Statement
Revenues
Expenses
Net Income
2,000,000
N/A
Long term debt
N/A
N/A
N/A
N/A
(30,102)
0✓
(100,000) ✓
0✓
100,000✓
(100,000)
N/A
Long term debt
0✓
✰ N/A
(161,709.1) x
Retained earnings
N/A
Interest expense
0✓
0 x
0
0 х
0 x
N/A
÷
Long term debt
✓ N/A
Retained earnings
= N/A
Interest expense
÷
Check
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