Swenson's incorporated issues a $400,000, 8 percent, 10-year mortgage note on December 31, 2007. The proceeds from the note are to be employed in financing a new muffin accelerator research laboratory. The terms of the note give for semi-annual installment payments, exclusive of real estate taxes and insurance, of $29,433. Payments are due June 30 and December 31.
a) Make an installment payments schedule for the first 2-years.
b) Make the entries for (1) the loan and (2) the first two installment payments.
c) Show how the net mortgage liability must be reported on the balance sheet at December 31, 2008.