Question

please provide the journa entries with the credited and debited section.

L UC C C C C PCMC. Pom 3. Paris Company buys a building on a plot of land for S100,000, paying $20,000 cash and signing a 20-year mortgage note for $80,000 at 6%. Monthly payments are $570. The first monthly payment was made in January, 2013. Please provide the journal entry for the first monthly payment. (3 points) 4. On January 1, 2014, Davie Services issued $20,000 of 8% bonds that mature in five years. They were sold at discount for a total of $19,000. Please provide the journal entry to issue the bonds. (3 points)

Answer 1

Solution 3 Journal Entries in the Books of Paris Company Description Building Debit Date Credit $1,00,000 $ 80,000 $ 20,000 Mortgage Payable Cash (to record purchase of building) Mortgage Payable Interest expense ($80000 x 6% x 1/12)$ Jan 2013 $ 170 400 Cash 570 (To record installment payment of mortgage) Solution 4 Journal Entries in the Davie Services Description Credit Date Debit $ 19,000 $ 1,000 Jan 1, 2014 Bank Discount on Issue of Bonds $ 20,000 8% Bonds payable (to record issue of Bonds at discount) Dec 31, 2014 Statement of P&L $ 200 $ Discount on Issue of Bonds 200 (To record amortization of discount on Issue) Discount on issue of Bonds is amortized over the life of Bond Discount Allowed on issue of Bonds $ 1,000 Life of Bonds 5 years Amortization per year ($1000 / 5) $ 200 per year

In case of any doubt, please comment below