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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 25
Accounting for mortgages payable
Ethan, Co., purchased a building valued at $250,000 and land valued at $50,000 on January 1, 2013. Ethan paid $20,000 cash and signed a 20-year, 6% mortgage payable for the balance. The amortization schedule shows that Ethan will pay $7,475 in principal the first year. Ethan plans on adjusting the current portion of the mortgage at year-end each December 31.
Requirements
1. Journalize the January 1, 2013 purchase.
2. Journalize the reclassification of the current portion of the mortgage.
3. Journalize the first monthly payment of $2,006 on January 31, 2013. (Round to the nearest dollar.).
Ethan, Co., purchased a building valued at $250,000 and land valued at $50,000 on January 1, 2013. Ethan paid $20,000 cash and signed a 20-year, 6% mortgage payable for the balance. The amortization schedule shows that Ethan will pay $7,475 in principal the first year. Ethan plans on adjusting the current portion of the mortgage at year-end each December 31.
Requirements
1. Journalize the January 1, 2013 purchase.
2. Journalize the reclassification of the current portion of the mortgage.
3. Journalize the first monthly payment of $2,006 on January 31, 2013. (Round to the nearest dollar.).
Explanation
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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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