Question

On January 1, 2018, Stoops Entertainment purchases a building for by borrowing $340,000, signing a 9%, 10-year mortgage. Installment payments of $4,306.98 are due at the end of each month, with the first payment due on January 31, 2018. Record the first monthly mortgage payment on January 31, 2018

Required:
Record the first monthly mortgage payment on January 31, 2018.

Answer 1

The journal entry would be that first monthly mortgage payment on January 31, 2018 should be debited for amount of $2,250

Step-by-step explanation:

In order to calculate the first monthly mortgage payment on January 31, 2018 we would have to make the following calculation according to the given data:

first monthly mortgage payment on January 31, 2018=$340,000*9%*1/12

first monthly mortgage payment on January 31, 2018=$2,550

Therefore, the journal entry would be that first monthly mortgage payment on January 31, 2018 should be debited for amount of $2,250