Sunland Company receives $282,000 when it issues a $282,000, 10%, mortgage note payable to finance the construction of a building at December 31, 2022. The terms provide for annual installment payments of $47,000 on December 31. Required:
Prepare an amortization schedule of a mortgage note for two years.

Date           cash flow      interest expense     principal paid      book value

D- 2022     282,000                 0                             0                   282,000

D- 2023      -47,000          28,200                     18,800               263,200

D- 2024      -47,000          26,320                     20,680               242,520

Interest expense during first year = $282,000 x 10% = $28,200

Interest expense during second year = $263,200 x 10% = $26,320

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