Swifty Inc signed a 10-year, 4%, $660,000 mortgage payable on November 30, 2020, with a bank to obtain financing for a

Question

Swifty Inc signed a 10-year, 4%, $660,000 mortgage payable on November 30, 2020, with a bank to obtain financing for a new equipment. The terms provide for instalment payments of $6,682 at the end of each month. Prepare the entries to record the mortgage on November 30, 2020, and the first two payments on December 31, 2020, and January 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. Round answers to the nearest whole dollar, e.g. 5,275.) Blended principal and interest payment Date 2020 Account Titles and Explanation Debit Credit 2021

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Answer Requirements asked Date Accounts title Debit Credit 30-Nov-20 Cash [or Equipment] $660,000 Mortgage note payable $660,000 (to record borrowing) 31-Dec-20 Interest Expense ($660000 x 4% x 1/12) $2,200 Mortgage Notes Payable $4,482 Cash $6,682 (to record payment #1) 31-Jan-21 Interest Expense ([$660000 - 4482]x 4% x 1/12) $2,185 Mortgage Notes Payable $4,497 Cash $6,682 (to record payment #1)

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Swifty Inc signed a 10-year, 4%, $660,000 mortgage payable on November 30, 2020, with a bank to obtain financing for a new equipment

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Archived Solution

Date	Accounts title	Debit	Credit
30-Nov-20	Cash [or Equipment]	$660,000
	Mortgage note payable		$660,000
	(to record borrowing)

31-Dec-20	Interest Expense ($660000 x 4% x 1/12)	$2,200
	Mortgage Notes Payable	$4,482
	Cash		$6,682
	(to record payment #1)

31-Jan-21	Interest Expense ([$660000 - 4482]x 4% x 1/12)	$2,185
	Mortgage Notes Payable	$4,497
	Cash		$6,682
	(to record payment #1)