Problem - On January 1, 2018, Stoops Entertainment purchases a building for $420,000, paying $110,000 down and borrowing the remaining $310,000, signing a 9%, 10-year mortgage. Installment payments of $3,926.95 are due at the end of each month, with the first payment due on January 31, 2018.
1. Record the purchase of the building on January 1, 2018.
2. Complete the first three rows of an amortization schedule.
3-a. Record the first monthly mortgage payment on January 31, 2018.
3-b. How much of the first payment goes to interest expense and how much goes to reducing the carrying value of the loan?