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Chapter 12: 3RQ (page 654)

What is a mortgage payable?

Short Answer

Expert verified

Long-term liability is a liability that is due in more than one yaer.

Step by step solution

01

Definition of mortgage

Mortgage means the long-term loan that is taken on the house or property.

02

Meaning of mortgage payable

Mortgage payable is a type of liability where the borrower secured its mortgage by assets. The mortgage payable is the current portion of the mortgage that is due in one year. Mortgage reduces the risk of the lenders.

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Most popular questions from this chapter

What is an annuity?

Determining the present value of bonds payable and journalizingusing the effective-interest amortization methodRelaxation, Inc. is authorized to issue 7%, 10-year bonds payable. On January 1, 2018,when the market interest rate is 12%, the company issues $300,000 of the bonds. Thebonds pay interest semiannually.

Requirements

1. How much cash did the company receive upon issuance of the bonds payable?(Round to the nearest dollar.)

2. Prepare an amortization table for the bond using the effective-interest method,through the first two interest payments (Round to the nearest dollar.)

3. Journalize the issuance of the bonds on January 1, 2018, and the first and secondpayments of the semiannual interest amount and amortization of the bonds onJune 30, 2018, and December 31, 2018. Explanations are not required.

What is the carrying amount of a bond?

When does a premium on bonds payable occur?

What is a bond payable?
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