Question :
11) On January 1, 2011, Ajax Corporation signed a $1,000,000, : 1253317
11) On January 1, 2011, Ajax Corporation signed a $1,000,000, 7%, 10-year mortgage note to buy a new warehouse. The note will be repaid in 10 equal annual installments of $142,378. Over the 10-year period, as each installment payment is made, the amount that Ajax Corporation will show on its balance sheet for mortgage payable will ________.
A) increase
B) decrease
C) stay the same
D) The answer cannot be determined from the information given.
12) On January 1, 2011, Alpha Enterprise signed a $100,000, 6%, 20-year mortgage note to buy a new warehouse. The mortgage will be repaid in a series of twenty equal annual installment payments. Over the 20-year period, as each installment payment is made, the portion of the payment that is interest expense will ________.
A) increase
B) decrease
C) stay the same
D) The answer cannot be determined from the information given.
13) On January 1, 2011, Alpha Enterprise signed a $100,000, 6%, 20-year mortgage note to buy a new warehouse. The mortgage will be repaid in a series of twenty equal annual installment payments. Over the 20-year period, as each installment payment is made, the portion of the payment that is used to reduce the principal will ________.
A) increase
B) decrease
C) stay the same
D) The answer cannot be determined from the information given.
14) On January 1, 2011, Alpha Enterprise signed a $100,000, 6%, 20-year mortgage note to buy a new warehouse. The mortgage will be repaid in a series of twenty equal annual installment payments. Over the 20-year period, as each installment payment is made, the amount that Alpha Enterprise will show on its balance sheet for mortgage payable will ________.
A) increase
B) decrease
C) stay the same
D) The answer cannot be determined from the information given.
15) On January 1, 2011, Zenith, Inc. signed a $200,000, 5%, 20-year mortgage note to buy a new office building. The mortgage will be repaid in a series of twenty equal annual installment payments. Over the 20-year period, as each installment payment is made, the portion of the payment that is interest expense will ________.
A) increase
B) decrease
C) stay the same
D) The answer cannot be determined from the information given.
16) On January 1, 2011, Zenith, Inc., signed a $200,000, 5%, 20-year mortgage note to buy a new office building. The mortgage will be repaid in a series of twenty equal annual installment payments. Over the 20-year period, as each installment payment is made, the portion of the payment that is used to reduce the principal will ________.
A) increase
B) decrease
C) stay the same
D) The answer cannot be determined from the information given.
17) On January 1, 2011, Zenith, Inc., signed a $200,000, 5%, 20-year mortgage note to buy a new office building. The mortgage will be repaid in a series of twenty equal annual installment payments. Over the 20-year period, as each installment payment is made, the amount that Zenith, Inc., will show on its balance sheet for mortgage payable will ________.
A) increase
B) decrease
C) stay the same
D) The answer cannot be determined from the information given.
18) On January 1, 2011, Ace Electronics borrowed $40,000 on a five-year, 7% note. The loan will be repaid in 5 equal installments of $9,756 each year, beginning on December 31, 2011. On its statement of cash flows for the year ended December 31, 2011, Ace will show cash paid for interest as ________ activity.
A) $(9,756), an operating
B) $(2,800), a financing
C) $(9,756), a financing
D) $(2,800), an operating
19) On January 1, 2011, Ace Electronics borrowed $40,000 on a five-year, 7% note. The loan will be repaid in 5 equal installments of $9,756 each year, beginning on December 31, 2011. Interest expense for the year ended December 31, 2012 will be ________ interest expense for 2011.
A) higher than
B) the same as
C) lower than
D) The answer cannot be determined from the information given.
20) On January 1, 2011, Ace Electronics borrowed $40,000 on a five-year, 7% note. The loan will be repaid in 5 equal installments of $9,756 each year, beginning on December 31, 2011. Notes payable at December 31, 2012 will be ________ notes payable at December 31, 2011.
A) higher than
B) the same as
C) lower than
D) The answer cannot be determined from the information given.
