GPC, Inc has a $150,000 mortgage liability. The mortgage is payable in monthly instatement of $1,543, which include interest computed at an annual rate of 12 percent (1percent monthly) Prepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the mortgage’s unpaid balance. (round to the nearest dollar). Prepare the journal entry to record the second monthly payment Will monthly interest increase, decrease, or stay the same over the life of the loan ? explain your answer please, including why this case the amount of principal included in the first two payments is the same.

Question

GPC, Inc has a $150,000 mortgage liability. The mortgage is payable in monthly instatement of $1,543, which include interest computed at an annual rate of 12 percent (1percent monthly)

  1. Prepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the mortgage’s unpaid balance. (round to the nearest dollar).
  2. Prepare the journal entry to record the second monthly payment
  3. Will monthly interest increase, decrease, or stay the same over the life of the loan ? explain your answer please, including why this case the amount of principal included in the first two payments is the same.

 

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