Explain the reduction in the mortgages unpaid balance


Glen Pool Club, Inc., has a $150,000 mortgage liabilty. The mortgage is payable in monthly installments of $1,543 , which include interest computed at an annual rate of 12 percent (1 percent monthly). Prepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the mortgage's unpaid balance. Prepare the journal entry to record the second monthly paymment. Will monthly interest increase, decrease or stay the same over the life of the loan? Explain.

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Accounting Basics: Explain the reduction in the mortgages unpaid balance
Reference No:- TGS0703073

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