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ual installments of $65,051 (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. I have some attempts in the chart attached b

ual installments of $65,051 (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. I have some attempts in the chart attached b

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, Patterson Inc. borrowed $1,000,000 on a 10%, 15‑year mortgage note payable. The note is to be repaid in equal semiannual installments of $65,051 (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.

I have some attempts in the chart attached by I do not know if its correct.

**Transaction Table Explanation** The table illustrates a financial scenario with emphasis on the balance sheet and income statement components over three transactions labeled a, b, and c. Below is a detailed breakdown of each section: **1. Transaction:** - **a.** - **b.** - **c.** **2. Cash Asset:** - **a.** $1,000,000 - **b.** $934,949 - **c.** $0 **3. Noncash Assets:** - **a.** $0 - **b.** N/A - **c.** $0 **Balance Sheet Components:** **4. Liabilities:** - **a.** $1,000,000 - **b.** Long-term debt $966,666.7 - **c.** Long-term debt $0 **5. Contrib. Capital (Contributed Capital):** - All transactions are marked as N/A. **6. Earned Capital:** - All transactions are marked as N/A. **Income Statement Components:** **7. Revenues:** - All transactions are marked as N/A. **8. Expenses:** - **a.** N/A - **b.** Interest expense: $65,051 - **c.** Interest expense: $65,051 **9. Net Income:** - **a.** $0 - **b.** -$65,051 - **c.** -$65,051 **Additional Notes:** - The table is designed to answer all parts of a given question and focuses on how transactions affect both the balance sheet and the income statement. - It shows a decrease in cash assets and the impact of interest expenses on net income. Please ensure to address every part of the question in relation to the provided table.
Transcribed Image Text:**Transaction Table Explanation** The table illustrates a financial scenario with emphasis on the balance sheet and income statement components over three transactions labeled a, b, and c. Below is a detailed breakdown of each section: **1. Transaction:** - **a.** - **b.** - **c.** **2. Cash Asset:** - **a.** $1,000,000 - **b.** $934,949 - **c.** $0 **3. Noncash Assets:** - **a.** $0 - **b.** N/A - **c.** $0 **Balance Sheet Components:** **4. Liabilities:** - **a.** $1,000,000 - **b.** Long-term debt $966,666.7 - **c.** Long-term debt $0 **5. Contrib. Capital (Contributed Capital):** - All transactions are marked as N/A. **6. Earned Capital:** - All transactions are marked as N/A. **Income Statement Components:** **7. Revenues:** - All transactions are marked as N/A. **8. Expenses:** - **a.** N/A - **b.** Interest expense: $65,051 - **c.** Interest expense: $65,051 **9. Net Income:** - **a.** $0 - **b.** -$65,051 - **c.** -$65,051 **Additional Notes:** - The table is designed to answer all parts of a given question and focuses on how transactions affect both the balance sheet and the income statement. - It shows a decrease in cash assets and the impact of interest expenses on net income. Please ensure to address every part of the question in relation to the provided table.
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