|Purpose:||(L.O. 7) This exercise will illustrate the accounting entries for a long-term note payable.|
The Agron Feelgood Clinic issued a $400,000, 10%, 10-year mortgage note on December 31, 2013. The terms provide for semiannual installment payments of $32,097.03 on June 30 and December 31. The note along with $80,000 cash was given in exchange for a new building.
Prepare the journal entries to record: