O'Reilly logo

Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition by Donald E. Kieso, Paul D. Kimmel, Jerry J. Weygandt

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

EXERCISE 10-10

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.

Instructions

Prepare the journal entries to record:

  • (a) The acquisition of the building and inception of the mortgage loan payable.
  • (b) The first mortgage payment on June 30, 2014.
  • (c) The second mortgage payment on December 31, 2014.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required