Answer:
See the journal entries below.
Explanation:
The journal entries will look as follows:
<u>Date Particulars Debit ($) Credit ($) </u>
31 Dec 2018 Cash 1,500,000
Mortgage payable 1,500,000
<em><u> (To record $1,500,000, 10%, 10-year mortgage note issued.) </u></em>
31 Dec 2018 Mortgage payable (w.2) 94,118
Interest exp. on Mortgage (w.1) 150,000
Cash 244,118
<u><em> (To record first installment payment on mortgage note.) </em></u>
Workings:
w.1. Interest expense on Mortgage = Mortgage payable * Interest rate = $1,500,000 * 10% = $150,000
w.2. Mortgage note principal repaid = Annual installment payment - w.1 = $244,118 - $150,000 = $94,118