Help to Journalize a mortgage note.?
Bradley corportaion issues a 1,200,000, 10%, 10 year mortgage on December 31, 2010, to obtain financing for a new building. The terms provide for semiannual installment payments of $ 96,291.
Preapare the entry to record the mortgage loan on December 31, 2010 and the first installment payment.
This is what I have but not sure if it’s correct. Could someone please verify it for me?
Debit cash 1,200,000
Debit interest expense 1,200,000 x 5%60,000
Debit Mortgage payable 36,291
Credit cash 96,291