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ACC 291 WileyPLUS Week 3 Assignment Problem P10-5A

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ACC 291 WileyPLUS Week 3 Assignment Problem 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.
Correct.
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.)
Semiannual
Interest
Period Cash Payment Interest Expense
Reduction
of Principal Principal Balance
Issue Date $ 400000
1 29433 $ 16000 13433 386567
2 29433 15463 13970 372597
3 29433 14904 14529 358068
4 29433 14323 15110 342958
Correct.
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 e.g. 10, 5, 3, 2. Round answer to 0
decimal places, e.g. 125.)
Date Account/Description Debit Credit
2010
Dec. 31 Cash 400000
Mortgage notes payable 400000
2011
June 30 Interest expense 16000
Mortgage notes payable 13433
Cash 29433

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ACC 291 WileyPLUS Week 3 Assignment Problem 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. Correct. 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.) Semiannual Interest Period Cash Pay ...
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