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?

Dec. 31

Debit cash 1,200,000
credit 1,200,000

June 30
Debit interest expense 1,200,000 x 5%60,000
Debit Mortgage payable 36,291
Credit cash 96,291

Register New Account
Reset Password