Novak Corp. receives $375,600 when it issues a $375,600, 10% mortgage note payable to finance the construction of a building at December 31, 2022. The terms provide for annual installment payments of $62,600 on December 31. Prepare the journal entries to record the mortgage loan and the first two payments.

Q: John issued a $1,300,000, 10%, 10-year mortgage note on December 31, 2020, to obtain financing for a…

A: a. To record the mortgage loan on December 31, 2020:Date: December 31, 2020Debit: Building (or…

Q: Larkspur, Inc. receives $260,400 when it issues a $260,400, 10% mortgage note payable to finance the…

A: Journal Entry is the primary step to record the transaction in the books of accounts. The increase…

Q: On January 1, 2024, Tropical Cruise Lines borrows $49,000 by agreeing to a 6%, five-year note with…

A: Note payable: Note payable also called promissory note. It is a legal instrument in which one party…

Q: Lisa Ehrlich Inc. issues a $1,300,000, 8%, 10-year mortgage note on December 31, 2022, to obtain…

A: The question asked to prepare the journal entries in the books of Lisa Ehrlich.   Journal entries:…

Q: [The following information applies to the questions displayed below] On January 1, 2024, Birmingham…

A: Interest expense of first month :— It is calculated by multiplying carrying value of mortgage…

Q: Bob's Builders Inc. enters into a 10-year, 6%, $200,000 mortgage to fınance the construction of a…

A: 1) journal on August 31 2020 Bank a/c Dr.                  200000         To 6% Mortgage.  200000…

Q: Hen it issues a $282,000, 10% mortgage note payable to finance the construction of a building at…

A: In the first transaction on December 31, 2022, we're recording the initiation of the mortgage loan.…

Q: Wildhorse Co. issued a five-year interest-bearing note payable for $324000 on January 1, 2019. Each…

A: Balance sheet is the financial statement which involves the total debt, liabilities, assets and…

Q: On September 1, 2023, Tipton Enterprises borrowed $400,000 on a mortgage to purchase land and a…

A: Calculate the balance in the Mortgage Payable account after the October 31 payment using Excel as…

Q: A Company issues four-year bonds with a $114,000 par value on January 1, 2021, at a price of…

A: Interest expense = 114000 x 5% x 6/12 = 2850 bond amortisation = (114000-109870)/8 = 516.25

Q: What amount of the payment made on January 1, 2022 will be interest expense?

A: Amount Borrowed = $360000 Interest Rate = 4% Fixed Annual Payment = $32379 Interest to be paid on…

Q: On January 1 of this year, Diorite borrows $100,000 with a 5%, 9-month loan. Interest is due at…

A: Journal entries means the book of prime entry incuding debit and credit item. Adjusting entry means…

Q: On January 1, 2021, Gundy Enterprises purchases an office building for $261,000, paying $51,000 doWH…

A: Solution 3a: Journal Entries Date Particulars Debit Credit 31-Jan-21 Interest expense…

Q: On January 12021Gundy Enterprises purchases an office building for $184,000, paying $44.000 down and…

A: A mortgage is a loan from the bank or the financial institution that helps the business to purchase…

Q: Oriole Company issued a $3,700,000, 10%, 10-year mortgage note payable to finance the construction…

A: Step 1:The required journal entries for the given transactions related to mortgage note payable are…

Q: On January 1, 2024, Tina's Tamales borrows $10,000 to purchase a delivery truck by agreeing to a 6%,…

A: Note payable: Note payable also called promissory note. It is a legal instrument in which one party…

Q: On January 1, 2018, King Inc. borrowed $190,000 and signed a 4-year, note payable with a 10%…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: Current Attempt in Progress Wildhorse Co. receives $372.000 when it issues a $372.000, 10%, mortgage…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: Oriole Company borrowed $790,000 on December 31, 2019, by issuing an $790,000, 9% mortgage note…

A: Lets understand the basics. When amount is borrowed against the notes then it needs to repaid with…

Q: en Company borrowed $150,000 from Lyon Country Bank. The terms of the loan agreement specified 4…

A: Liability -The term "liability" refers to any type of debt that a company has to a person or another…

Q: On January 1, 2018, Allgood Company purchased equipment and signed a six =year mortgage note for…

A: For calculating interest expense, we will need to make amortization schedule of loan over a period…

Q: E15-9B Base Line Co. receives $250,000 when it issues a $250,000, 8%, mortgage note payable to…

A: A mortgage is a type of loan used to finance the purchase of a property, such as a house or a…

Q: Larkspur, Inc. receives $260,400 when it issues a $260,400, 10% mortgage note payable to finance the…

A: Journal: Recording of a business transactions in a chronological order.

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A: Note payable: The person borrows an amount and issue a note to the lender that he will pay the…

Q: On March 1, 2020 Inland corporation purchased a building by signing a $185,000 long term mortgage…

A: Mortgage is a value which is borrowed from the other sources like banks and this amount repaid later…

Q: (a) Prepare an installment payments schedule for the first 4 years. (b) Prepare the entries for (1)…

A: Year Opening balance Interest @8% Total Amount due Installment paid Closing Balane a b c= b x 8% d…

Q: Upon January 1, 2020, Sally Corp. borrowed $360,000 from County Bank and signed a 15-year note…

A: It is simply a fee levied against the borrower for the use of an asset. Borrowed assets might…

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A: Lets understand the basics. Journal entry is required to make to record event and transaction that…

Q: prepare a three-year (monthly) amortization schedule to classify the notes payable into its current…

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Q: DBC Company has received a confirmation letter from the First National Bank of Miami (FNBM) about a…

A: 1) Prepare a table calculating average used balance, interest rate applicable, interest on unused…

Q: Cullumber Company borrowed $313,000 on January 1, 2022, by issuing a $313,000, 10% mortgage note…

A: Notes payable is a written promissory agreement, wherein a borrower borrows a certain amount of…

Q: (b) Indicate the amount of mortgage note payable to be reported as a current liability and as a…

A: Introduction: The liabilities of a corporation are listed on its balance sheet, which is a common…

Q: On December 31, 2023, Sandy Company has a Note Receivable of $6,000. The note will be collected in…

A: Current asset can be converted into cash within 12 months whereas long term assets has a life of…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.