Talkington Electronics issues a $353,700, 10%, 10-year mortgage note on December 31, 2013. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provide for semiannual installment payments, exclusive of real estate taxes and insurance, of $28,382. Payments are due June 30 and December 31.
1 Prepare an installment payments schedule for the first 2 years.
2 Prepare the entries for (1) the loan and (2) the first two installment payments.
3 Show how the total mortgage liability should be reported on the balance sheet at December 31, 2014. ( Talkington Electronics balance sheet December 31 2014 )