Engels On December 31, 2020, American Elm Inc., borrowed €746 000 on a 3%, 20-year mortgage note payable. The note is to be repaid in equal semiannual instalments of €15 890 (payable on June 30 and December 31). Requirement: What are the correct summarizing journal entries to record: (1) the issuance of the mortgage note payable (2) the payment of the second instalment on December 31, 2021 For the purpose of the question please assume that the debit entry of Mortgage note payable on June 30 is €4 700.
Engels On December 31, 2020, American Elm Inc., borrowed €746 000 on a 3%, 20-year mortgage note payable. The note is to be repaid in equal semiannual instalments of €15 890 (payable on June 30 and December 31). Requirement: What are the correct summarizing journal entries to record: (1) the issuance of the mortgage note payable (2) the payment of the second instalment on December 31, 2021 For the purpose of the question please assume that the debit entry of Mortgage note payable on June 30 is €4 700.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:Engels
On December 31, 2020, American Elm Inc., borrowed €746 000 on a 3%, 20-year mortgage note payable.
The note is to be repaid in equal semiannual instalments of €15 890 (payable on June 30 and December
31).
Requirement: What are the orrect summarizing journal entries to record:
(1) the issuance of the mortgage note payable
(2) the payment of the second instalment on December 31, 2021
For the purpose of the question please assume that the debit entry of Mortgage note payable on June
30 is €4 700.
31/december 2020
Account Naam
Debit
Credit
Liquide middelen (Cash)
€746 000
€746 000
Hypothecaire schuld (Mortgage
note payable)
31/december 2021
Account Naam
Debit
Credit
Rentekosten (Interest expense)
€11 120
€4 771
Hypothecaire schuld (Mortgage
note payable)
€15 890
Liquide middelen (Cash)
31/december 2020
Debit
Credit
Account Naam
€746 000
Liquide middelen (Cash)
€746 000
Hypothecaire schuld (Mortgage
note payable)
31/december 2021
Debit
Credit
Account Naam
€15 890
Rentekosten (Interest expense)
C15 890

Transcribed Image Text:ACCOUnt Naam
Debit
Creait
Rentekosten (Interest expense)
€11 120
Hypothecaire schuld (Mortgage
note payable)
€4 771
Liquide middelen (Cash)
€15 890
31/december 2020
Account Naam
Debit
Credit
Liquide middelen (Cash)
€746 000
Hypothecaire schuld (Mortgage
€746 000
note payable)
31/december 2021
Account Naam
Debit
Credit
Rentekosten (Interest expense)
€15 890
Liquide middelen (Cash)
€15 890
31/december 2020
account Naam
Debit
Credit
Liquide middelen (Cash)
C746 000
€746 000
Hypothecaire schuld (Mortgage
note payable)
31/december 2021
Account Naam
Debit
Credit
C11 120
Rentekosten (Interest expense)
Hypothecaire schuld (Mortgoge
note payable)
€27 010
€15 890
Liquide middelen (Cosh)
31/december 2020
Account Naam
Debit
Credit
€746 000
Liquide middelen (Cash)
Hypothecaire schuld (Mortgage
note payable)
C746 000
31/december 2021
Debit
Credit
Account Naam
Rentekosten (Interest expense)
€1 120
C1 120
Liquide middelen (Cash)
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