question archive Teal Mountain Construction Inc
Teal Mountain Construction Inc
Subject:AccountingPrice: Bought3
Teal Mountain Construction Inc. needed financing to buy two Case graders. Teal Mountain receives $360,000 on January 1, 2022, when it issues a 5-year, 5% mortgage note payable. The terms provide for semi-annual instalment payments on July 1 and January 1, with fixed principal amounts.
Calculate the fixed principal amount required each six-month period.
| Fixed principal portion | $ |
do an instalment payment schedule for the first three interest periods.
| TEAL MOUNTAIN CONSTRUCTION INC. Instalment Payment Schedule - Fixed Principal Payments |
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| Interest Period | Cash Payment | Interest Expense | Reduction of Principal | Principal Balance | ||||
| Jan. 1, 2022 | $ | $ | $ | $ | ||||
| July 1, 2022 | ||||||||
| Jan. 1, 2023 | ||||||||
| July 1, 2023 | ||||||||
do the journal entries to record the mortgage note payable and the first three instalment payments. Prepare any necessary adjusting entries at Teal Mountain's December 31, 2022 year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
| Date | Account Titles and Explanation | Debit | Credit |
| Jan. 1, 2022 | |||
| July 1, 2022 | |||
| Dec. 31, 2022 | |||
| Jan. 1, 2023 | |||
| July 1, 2023 | |||
Provide the balance sheet disclosure for the mortgage note payable at December 31, 2022, being specific about the classifications.
| TEAL MOUNTAIN CONSTRUCTION INC. Balance Sheet (Partial) December 31, 2022 |
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Total Property, Plant and EquipmentCurrent LiabilitiesProperty, Plant and EquipmentShareholders' EquityNon-Current LiabilitiesTotal Current LiabilitiesTotal Shareholders' EquityCurrent AssetsTotal Liabilities and Shareholders' EquityTotal Non-Current LiabilitiesTotal AssetsLong-Term InvestmentsTotal Current AssetsShort-Term Investments |
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Interest PayableCashInterest ExpenseMortgage Note PayableCurrent Portion of Mortgage Payable |
$ | |
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CashInterest PayableCurrent Portion of Mortgage PayableMortgage Note PayableInterest Expense |
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Long-Term InvestmentsTotal Current LiabilitiesTotal Liabilities and Shareholders' EquityTotal Property, Plant and EquipmentProperty, Plant and EquipmentCurrent AssetsTotal AssetsShort-Term InvestmentsTotal Shareholders' EquityNon-Current LiabilitiesShareholders' EquityTotal Current AssetsCurrent LiabilitiesTotal Non-Current Liabilities |
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Interest ExpenseCashMortgage Note PayableInterest PayableCurrent Portion of Mortgage Payable |
$ | |
