Adjusting Entries- Round to two decimal places The annual interest rate on the mortgage payable was 7.50 percent. Interest expense for one-half month should be computed because the building and land were purchased and the liability incurred on June 16 (June 16: Byte purchased a building and the land it is on for $143,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $23,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of $14,300 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1.)
The annual interest rate on the mortgage payable was 7.50 percent. Interest expense for one-half month should be computed because the building and land were purchased and the liability incurred on June 16 (June 16: Byte purchased a building and the land it is on for $143,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $23,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of $14,300 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1.)
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