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% (1% monthly).
a. Prepare a partial amortization table showing the original balance of this loan, and the allocation of the first two monthly payments between interest expense and the reduction in the mortgage's unpaid balance. (Round to the nearest dollar.)
b. Prepare the journal entry to record the second monthly payment.
c. Will monthly interest increase, decrease, or stay the same over the life of the loan? Explain your answer.