On January 1,Clive Corporation signed a $175,000,8%,30-year mortgage that requires semiannual payments of $7,735 on June 30 and December 31 of each year.The journal entry to record the second semiannual payment would be (round interest calculation to the nearest dollar)to:

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The correct answer is C because the entry to record the second semiannual payment would be to debit Interest Expense for $6,971, debit Mortgage Payable for $764, and credit Cash for $7,735. The interest expense is calculated as the product of the outstanding principal balance ($175,000) and the semiannual interest rate (4%). The mortgage payable is reduced by the amount of the principal payment ($764).

On January 1,Clive Corporation Signed a $175,000,8%,30-Year Mortgage That Requires