Thayer Company Purchased a Building on January 2 by Signing

question 276

Multiple Choice

Thayer Company purchased a building on January 2 by signing a long-term $2,520,000 mortgage with monthly payments of $23,100. The mortgage carries an interest rate of 10 percent. The entry to record the first monthly payment will include a

• A) debit to the Cash account for $23,100.
• B) credit to the Cash account for $21,000.
• C) debit to the Interest Expense account for $21,000.
• D) credit to the Mortgage Payable account for $23,100.

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Definitions:

Proposition

A pronouncement that indicates a viewpoint or judgment.

Premises

Statements or ideas on which an argument or inference is based or from which a conclusion is drawn.

Conclusion

The final part of something, such as an argument or text, summarizing or deducing the outcomes based on the preceding information.

Direct Observation

A research method involving the direct and unobtrusive observation of individuals or phenomena in their natural setting.