Temple Corporation purchased a piece of real estate, paying $4,000,000 cash and financing$7,000,000 of the purchase price with a 10-year, 15% installment note. The note calls forequal monthly payments that will result in the debt being completely repaid by the end ofthe tenth year. In this situation:The aggregate amount of the monthly payments is $7,000,000.B. Each monthly payment is greater than the amount of interest accruing each month.C.A.The portion of each payment representing interest expense will increase over the 10-year period, since principal is being paid off, yet the payment amount does notdecrease.The portion of each monthly payment representing repayment of principal remains thesame throughout the 10-year period.D.

Accrued InterestAccrued interest is the amount of interest earned on a debt, such as a bond, but not…

Answered: Temple Corporation purchased a piece of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2. ABC Realty sold a piece of land for P250,000. A down payment of P50,000 was made and the remainder is to be paid in equal semiannual installments, the first due 6 months after the date of sale. The interest is 8% compounded semiannually and the debt is to be amortized in 5 years. a. How much semiannual payment is required? b. What will the total amount of the payment be? c. How much interest will be paid? d. What is the total cost of the property? e. Prepare an amortization schedule for the present value of the loan after making the down payment.
The Flemings secured a bank loan of $400,000 to help finance the purchase of a house. The bank charges interest at a rate of 4%/year on the unpaid balance, and interest computations are made at the end of each month. The Flemings have agreed to repay the loan in equal monthly installments over 25 years. What should be the size of each repayment if the loan is to be amortized at the end of the term? (Round your answer to the nearest cent.)
Libby Company purchased equipment by paying $5,600 cash on the purchase date and agreed to pay $5,600 every six months during the next four years. The first payment is due six months after the purchase date. Libby's incremental borrowing rate is 8%. The equipment reported on the balance sheet as of the purchase date is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)
Last two parts solve please.
Tricana Corporation borrowed $80,000.00 at 4% compounded quarterly for 9 years to buy a warehouse. Equal payments are made at the end of every 3 months. (a) (b) (c) (d) Determine the size of the quarterly payments. Compute the interest included in payment 16. Determine the principal repaid in payment period 11. Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals. (a) The size of the quarterly payment is S (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The interest included in payment 16 is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (c) The principal repaid in payment period 11 is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (d) Complete the table below for the first three payments in the…
Kirk Company purchased equipment by making a down payment of P400, 000 and issuing a note payable for P1, 800,000. A payment of P600, 000 is to be made at the end each year for three years. Theapplicable rate of interest is 8%. The present value of an ordinary annuity of 1 for three years at 8% is2.58, and the present value for the future amount of a single sum for three years at 8% is .735. Shippingcharges for the equipment of P200, 000 and installation charges of P350, 000 were incurred. What is thecapitalized cost of the equipment?
A company plans to make four annual deposits of $4,250 each to a special building fund. The fund's assets will be invested in mortgage instruments expected to pay interest at 12% on the fund's balance. Determine how much will be accumulated in the fund after four years under each of the following situations: 1. The $4250 annual deposit are made at the end of each of the four years and interest is compounded annually. 2. The $4250 annual deposit are made at the beginning of each of the four years and interest is compounded annually. 3. The $4250 annual deposit are made at the beginning of each of the four years and interest is compounded quarterly. 4. The $4250 annual deposit are made at the beginning of each of the four years interest is compounded annually, and interest earned is withdrawn at the end of each year.
The Flemings secured a bank loan of $272,000 to help finance the purchase of a house. The bank charges interest at a rate of 4%/year on the unpaid balance, and interest computations are made at the end of each month. The Flemings have agreed to repay the loan in equal monthly installments over 25 years. What should be the size of each repayment if the loan is to be amortized at the end of the term? (Round your answer to the nearest cent.)$
A $560,000 townhome in Richmond Hill was purchased with a down payment of 20% of the amount. A 20-year mortgage was taken for the balance. The negotiated fixed interest rate was 5.25% compounded semi-annually for a three-year term with repayments made at the end of every month. a. What is the size of the monthly payment? Round to the nearest cent b. What was the principal balance at the end of the three-year term? Round to the nearest cent c. By how much did the amortization period shorten if the size of the periodic payments were increased by 15% starting from the 37th payment? Assume the same interest rate. months
On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $107,000 face-value, four-year term note that had an 6 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,879 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $59,000 cash per year. b. Prepare an income statement and balance sheetfor each of the four years. Rent revenue is collected in cash at the end of each year. (Hint: Record the transactions for each year in T-accounts before preparing the financial statements.)
Tricana Corporation borrowed $75,000.00 at 3% compounded monthly for 14 years to buy a warehouse. Equal payments are made at the end of every month. (a) (b) (c) (d) Determine the size of the monthly payments. Compute the interest included in payment 23. Determine the principal repaid in payment period 79. Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals. (a) The size of the monthly payment is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The interest included in payment 23 is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (c) The principal repaid in payment period 79 is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (d) Complete the table below for the first three payments in the…
A corporation has decided to use borrowed capital to finance a portion of an equipment purchase. The equipment will be partially financed by borrowing $40,000 on a 2-year contract at 7% interest compounded annually, with the loan to be repaid in two equal EOY installments. The average inflation rate during this period is expected to be 2%. Determine the loan payment amount.

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