Question - Glen Pool Club, Inc. has a $150,000 mortgage liability. 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 the journal entry to record the second monthly payment.
Will monthly interest increase, decrease, or stay the same over the life of the loan? Explain your answer, including why in this case the amount of principal included in the first two payments is the same.