Show Attempt History Current Attempt in Progress A company takes out an eight-year, $610,000 mortgage on September 1. The interest rate on the mortgage is 7% per year, and blended payments of $8,317 (including both interest and principal) are to be made at the end of each month. The following is an extract from the mortgage amortization table: Your answer is partially correct. Determine the missing amounts. (Round answers to 0 decimal places, e.g. 125.) Beginning Mortgage Balance Payment Interest Payment 1 $610,000 8317 (1) $3,558 Payment 2 605,241 8,317 3510 (3) Payment 3 (5) 8,317 3,503 Payment 4 595,641 8,317 3,475 eTextbook and Media List of Accounts

Show Attempt History Current Attempt in Progress A company takes out an eight-year, $610,000 mortgage on September 1. The interest rate on the mortgage is 7% per year, and blended payments of $8,317 (including both interest and principal) are to be made at the end of each month. The following is an extract from the mortgage amortization table: Your answer is partially correct. Determine the missing amounts. (Round answers to 0 decimal places, e.g. 125.) Beginning Mortgage Balance Payment Interest Payment 1 $610,000 8317 (1) $3,558 Payment 2 605,241 8,317 3510 (3) Payment 3 (5) 8,317 3,503 Payment 4 595,641 8,317 3,475 eTextbook and Media List of Accounts

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1EB: Sharapovich Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the...

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Sharapovich Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the interest rate was 5% compounded annually. Sharapovich Inc. will make payments of $11,548.74 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
Campus Flights takes out a bank loan in the amount of $200,500 on March 1. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 8%, recognized on December 31. (Round answers to the nearest whole dollar if needed.) A. Compute the interest recognized as of December 31 in year 1 rounded to the whole dollar. B. Compute the principal due in year 1.
Serial Installments; Amounts Applicable to Interest and Principal Ronald McDuffie purchases a new car at a cost of 14,400. He pays 3,000 down and issues an installment note payable by which he promises to pay the balance in 18 equal monthly installments, which include interest at an annual rate of 18% on the remaining unpaid balance at the beginning of each month starting with the first month after the purchase. Required: 1. Compute the equal installment payments. 2. Compute the interest that will be paid for each of the first two periods. Indicate the amount of each payment that will be a reduction of principal.
Compound Interest Issues You are given the following situations: 1. Thomas Petty owes a debt of 7,000 from the purchase of a boat. The debt bears 12% interest payable annually. Thomas will pay the debt and interest in 5 annual installments beginning in 1 year. Calculate the equal annual installments that will pay off the debt and interest at 12% on the unpaid balance. 2. On January 1, 2019, John Cothran offers to buy Ruth Houses used tractor and equipment for 4,000 payable in 12 equal semiannual installments which are to include payment of 10% interest on the unpaid balance and payment of a portion of the principal with the first installment to be made on January 1, 2019. Calculate the amount of each of these installments. 3. Nadine Love invests in a 60,000 annuity at 12% compounded annually on March 1, 2019. The first of 15 receipts from the annuity is payable to Love on March 1, 2029, 10 years after the annuity is purchased and on the date Love expects to retire. Calculate the amount of each of the 15 equal annual receipts. Required: Using the appropriate tables, solve each of the preceding situations.
Use Future Value and Present Value Tables to Apply Compound Interest to Accounting Transactions Kristen Quinn makes equal deposits of $500 semiannually for 4 years. Required: What is the future value at 8%? (Note: Round answers to two decimal places.)
Cost of Bank Loan On March 1, Minnerly Motors obtains a business loan from a local bank. The loan is a 25,000 interest-only loan with a nominal rate of 11%. Interest is calculated on a simple interest basis with a 365-day year. What is Minnerlys interest charge for the first month (assuming 31 days in the month)?
Discounting of Notes Payable On October 30, 2019, Sanchez Company acquired a piece of machinery and signed a 12-month note for 24,000. The lace value of the note includes the price of the machinery and interest. The note is to be paid in four 6,000 quarterly installments. The value of the machinery is the present value of the four quarterly payments discounted at an annual interest rate of 16%. Required: 1. Prepare all the journal entries required to record the preceding information including the year-end adjusting entry and any payments. Present value techniques should be used. 2. Show how the preceding items would be reported on the December 31, 2019, balance sheet.
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
CHALLENGE PROBLEM This problem challenges you to apply your cumulative accounting knowledge to move a step beyond the material in the chapter. On April 1, 20-1, Rebound Co. issued 300,000 of 10%, 10-year bonds, callable at 105 after three years, at face value. On April 1, 20-4, after completing three years of interest payments on the bonds, Rebound is considering calling the bonds and issuing 300,000 of new 8%, 10-year bonds at face value. The current market interest rate is only 8%, so Rebound thinks it might save money by taking this action. REQUIRED 1. Compute the net savings to Rebound over the life of the original bond issue if it calls the old bonds and issues the new bonds. 2. Assuming Rebound calls the original bond issue, prepare the journal entry for the bond redemption.