[TracyPete21]

I can't seem to find a definite answer in my book so I am reaching out.
On June 30th Rioux Management Company purchased land for $720,000 a buliding for $1,080,000, paying $900,000 cash and issuing a 7% note for the balance secured by a mortgage on the property. The terms of the note privide for 20 semiannual payments of $45,000 on the principal plus the interest accrued from the date of the preceding payment.
A. Journalize the entry to record the transaction on June 30th.
B. Journalize the entry to record the payment of the 1st installment on Dec 31
C. Journalize the entry to record the payment of the 2nd installment the following June 30th.

Any help would be greatly apperciated.

[Just Looking]

I'll get you started. If you'll post your entries, I'll check them for you.

A. You will have debits to Land and Building. You will have credits to Cash and Mortgage Payable.

B. You will debit the $45,000 to the Mortgage Payable. After each of these payments is made, that account would be zero - since 20 payments of $45,000 each equal the $900,000 mortgage. You will also have a debit for interest, which you need to compute. Currently you owe $900,000 at 7% for 6 months. The sum of those two debits will be your payment, thus a credit to cash.

C. Same as B, except your principal balance has been lowered by the $45,000.