solved Kindly check the attached file for the questions.Note 5: Mortgages

Kindly check the attached file for the questions.Note 5: Mortgages on Property, Plant, and Equipment In connection with these mortgages, the company is required to maintain minimum net worth and comply with other financial covenants, including a restriction limiting loans to officers to less than $2,000,000, At December 31, Year 2, the company is in compliance with these covenants. The $ 1,794,000 note payable to bank due on April 30, Year 3, is classified as a current liability at December 31, Year 2. The aggregate maturities of mortgages are as follows ($ in thousands): Year Amount Consolidated Balance Sheet ($ in thousands) Year 2 Year 1 Current liabilities: Current installments on mortgages $ 2.747 $ 1,402 Current installments on capital lease obligation 607 -0- Accounts payable 12,916 15,859 Accrued sales tax 1,574 1.760 Other accrued expenses 1.945 3.118 Deferred income taxes 303 146 Due to officer -0- 599 Income taxes payable 988 -0- Total current liabilities $21,080 $22,884 Consolidated Statement of Cash Flows ($ in thousands) Year 2 Year 1 Cash flows from financing activities: Net increase (decrease) in notes payable $ -0- $(3,500) Principal payments on mortgages (1,298) (1,194) Principal payments under capital lease obligation (214) -0- Proceeds from common stock offering -0- -0- Proceeds from exercise of common stock options 255 145 Repurchase of common stock -0- (3,383) Net cash provided by (used in) financing activities $(1,257) $(7,9’32) Required: What was the current portion of Potter’s mortgage payable at the end ofHow much did Potter pay in cash to reduce its mortgage payable duringExplain the difference between your answer to requirement I and your answer to requirement 2.What are the components of the current portion of the mortgage payable as of the end of Year 2?Assume that the next quarterly’ installment on the industrial development bond is due on March 31 Year 3. Prepare a journal entry to record the installment payment and any interest. Assume that the effective interest rate for the bond is 14% per year.The company has a mortgage note payable for $1,794,000 that comes due on April 30, year 3. Suppose that this note is paid by signing of a new 14% note for the amount due. Prepare the April 30 year 3, journal entry to record this refinancing of the old note. Instead of refinancing the note, suppose the company pays the principal along with any remaining interest on April 30, year 3. Prepare a journal entry to record this cash payment. Year 1? Year 2?