Leoni Co. receives $240,000 when it issues a $240,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2011

E10-15 Leoni Co. receives $240,000 when it issues a $240,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2011. The terms provide for semiannual installment payments of $20,000 on June 30 and December 31.

Prepare the journal entries to record the mortgage loan and the first two installment payments.

Click here for the solution: Leoni Co. receives $240,000 when it issues a $240,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2011

Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note on December 31, 2010

P10-5A Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note on December 31, 2010. 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.

Instructions:
a. Complete the installment payments schedule for the first 2 years.
b. Prepare the entries for (1) the loan and (2) the first two installment payments.
c. Show how the total mortgage liability should be reported on the balance sheet at December 31, 2011.current liabilities. Long term liabilities.

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