Answer and Explanation:
The Journal entry is shown below:-
Dec 2019 Cash Dr, $180,000
To Mortgage Payable $180,000
(Being mortgage loan taken is recorded)
Dec 2020 Interest expenses Dr,$16,200
Mortgage Payable Dr, $13,800
To Cash $30,000
(Being first installment payment is recorded)
Dec 2021 Interest expenses Dr,$14,742
Mortgage Payable Dr, $15,258
To Cash $30,000
(Being second installment payment is recorded)
Working note:-
For 2020 Interest expenses = $180,000 × 9%
= $16,200
Mortgage payable = $30,000 - $16,200
= $13,800
For 2021 Interest expenses = ($180,000 - $16,200) × 9%
= $14,742
Mortgage payable = $30,000 - $14,742
= $15,258
