Question

Exercise 10-24 (Part Level Submission) Oriole Company receives $385,000 when it issues a $385,000, 5%, mortgage note payable to finance the construction of a building at December 31, 2017. The terms provide for annual installment payments of $37,092 on December 31. Prepare the mortgage payable table showing interest and principal amounts.

Answer 1

Answer:

Mortgage Payable Table is prepared in an MS Excel file which is attached with this answer, please find it

Explanation:

The loan which is received by a person for purchase of real estate property or alternatively existing property owner to raise fund from the property. The mortgage are paid with interest over a specific period of time in installment of monthly quarterly semiannually or yearly.

Installment includes both principal payment and Interest Payment.

In this question The first payment on December 31, 2018 included

Total Payment = $37,092

Interest Payment = 385,000 x 5% = $19,250

Principal Payment = $37,092 - $19,250 = $17,842