Chapter 12, Problem 12.2SE

1.

To determine

Mortgage Payable

Mortgages payable is referred to the long-term debts owed by the business that are secured with the specific assets of the business. In other words under mortgages payable, the borrower promises to transfer the legal ownership of some specified assets, pledged as collateral security, in the event of non-payment of the mortgages debt on maturity to the creditor. Like the long-term debt, the total mortgages payable has some current portion that is required to be paid within a year and some other portion that is paid after one year.

To Journalize: The purchase of building and land at their market value.

2.

To determine

To Journalize: The first monthly payment of $3,370 on January 31, 2018.