Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note on December 31, 2007. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provide for semiannual installment payments, exclusive of real estate taxes and insurance, of $29,433. Payments are due June 30 and December 31.
Complete the installment payments schedule for the first 2 years. (Round answers to 0 decimal places, e.g. 125. Use rounded amounts for future calculations.)
Prepare the entries for (1) the loan and (2) the first two installment payments. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3,
2.) Show how the total mortgage liability should be reported on the balance sheet at December 31, 2008.
On July 1, 2011, Atwater Corporation issued $2,098,000 face value, 12%, 10-year bonds at $2,507,354. This price resulted in an effective-interest rate of 9% on the bonds. Atwater uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1.