question on january 1 2015 stoops entertainment purchases a buildingfor 520 000 payi 4278082
Question
On January 1, 2015, Stoops Entertainment purchases a buildingfor $520,000, paying $110,000 down and borrowing the remaining$410,000, signing a 9%, 20-year mortgage. Installment payments of$3, 688.88 are due at the end of each month, with the first paymentdue on January 31, 2015.
1. Record journal entry for the purchase of the building onJanuary 1, January 31, 2015.
2. Complete the first three rows of an amortizationschedule.
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Date |
Cash Paid |
Interest Expense |
Decrease in Carrying Value |
Carrying Value |
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1/1/15 |
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01/31/15 |
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02/28/15 |
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3-a. Record the journal entry for the first monthly mortgagepayment on January 31, 2015
3-b. How much of the first payment goes to interest expense andhow much goes to reducing the carrying value of the loan?
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Interest Expense |
Reducing the Carrying Value |
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First Payment |
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4. Total payments over the 20 years are $885, 331($3,688.88x240monthly payments). How much of this is interest expense and howmuch is actual payment of the loan?
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Actual Payments on the loan= |
? |
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Interest Expense= |
? |