A Mortgage payable account is $250,000 balance and an Accrued Expenses account is $45,000 on June 30th, 2016.
the problem says “mortgage payable is payable in semiannual installments of $5,000 each plus interest. The next payment is due October 31, 2016. Interest has been properly accrued and is included in accrued expenses”.
I need to find the mortgage payable amount to go in the balance sheet for June 30, 2016. I assume the $5,000 installment gets deducted from the Mortgage payable account but what is the amount of the interest that needs to be deducted? Please show your calculations so I understand. Does the accrued expenses account balance get involved in this question?