Fretz Inc. Issues a CHF2,500,000, 8%, 20-year mortgage on January 1, 2014. The terms call for semi-annual installment payments of CHF252,620. The entry to record the first installment payment will include

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The first installment payment includes both interest and principal. The interest for the first period is CHF100,000 (CHF2,500,000 * 8% / 2), so the principal reduction is CHF152,620 (CHF252,620 - CHF100,000), which is debited to Mortgage Payable.

Fretz Inc Issues a CHF2,500,000, 8%, 20-Year Mortgage on January 1