Need help with accounting question, please answer all parts. Thanks! Question 2

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Need help with accounting question, please answer all parts. Thanks!

Question 2 Nance Co. receives $371,500 when it issues a $371,500, 7%, mortgage note payable to finance the construction of a building at December 31, 2014, The terms provide for semiannual installment payments of $20,199 on June 30 and December 31 Prepare the schedule using effective-interest method to amortize bond premium or discount of Nance Co. (Round answers to 0 decimal places, e.g. 125.) emiánnu Interest Period Cash Payment Interest Expense Reduction of Principal Principa Balance Issue date 6/30/15 12/31/15 SHOW LIST OF ACCOUNTS Prepare the journal entries to record the mortgage loan. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2014 cash 371500 Mortgage Payable 371500 SHOW LIST OF ACCOUNTS

Explanation / Answer

1)

semiannual interest period cash payment interest expense Reduction of principal principal balance issue date 371500 6/30/15 20199 13002.5   [371500*.07*6/12] 7196.5    [20199-7196.5] 364303.5   [371500-7196.5] 12/31/15 20199 12750.62   [364303.5*.07*6/12] 7448.38 356855.12

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