Question : 44) On January 1, 2011, the company borrowed $200,000 from : 1253322

 

44) On January 1, 2011, the company borrowed $200,000 from Suwannee Local Bank for 10 years at 6%. The company will make equal annual payments of $27,173.58 on December 31 of each year, beginning December 31, 2011.

Part A: Complete the amortization schedule for the first four loan payments:

 

 

Mortgage balance

 

Annual payment

Interest portion of mortgage

Amount of mortgage reduction

Beginning balance

$200,000

1st

 

 

 

After 1st payment

 

2nd

 

 

 

After 2nd payment

 

3rd

 

 

 

After 3rd payment

 

4th

 

 

 

 

Part B: Select the column that represents the financial statement where the line item will appear. Then fill in the correct dollar amount.

 

 

 

Income Statement

Statement of Cash Flows

Balance Sheet

1

Interest expense for 2011

 

 

 

2

Mortgage payable at December 31,2011

 

 

 

3

Interest paid in 2011

 

 

 

4

Loan principal paid in 2011

 

 

 

5

Interest expense for 2012

 

 

 

6

Mortgage payable at December 31, 2012

 

 

 

7

Interest paid in 2012

 

 

 

8

Loan principal paid in 2012

 

 

 

 

 

45) B. Row, Inc. needed some long-term financing and arranged for a 10-year, $100,000, 7% mortgage loan on January 1, 2010. Annual payments of $14,238 will be made on December 31 each year. Round to the nearest dollar.

Part A: Show the effect on the accounting equation:

  Shareholders’ equity

 

 

Assets

Liabilities

CC

Retained earnings

1.

Jan. 1, 2010, borrowed $100,000

 

 

 

 

2.

Dec. 31, 2010, made the first loan payment

 

 

 

 

3.

Dec. 31, 2011, made the second loan payment

 

 

 

 

 

Part B: For each item, write in the amount (even if $0) as of or for the Year Ended December 31, 2010 and 2011 in the column of one financial statement where each amount is found.

 

2010:

 

Amount

Financial

1.

Mortgage payable

 

 

2.

Interest expense

 

 

3.

Payment of loan principal

 

 

4.

Interest paid

 

 

 

2011:

 

Amount

Financial

5.

Mortgage payable

 

 

6.

Interest expense

 

 

 

46) Install, Inc. borrowed $80,000 by signing an 8% mortgage note on December 31, 2009. The annual interest rate is 8%, with semiannual payments of $4,042 made on June 30 and December 31 every year. Round to the nearest dollar.

Part A: Show the effect on the accounting equation:

Shareholders’ equity

 

 

Assets

Liabilities

CC

Retained earnings

1

Dec. 31, 2009

 

 

 

 

Shareholders’ equity

 

 

Assets

Liabilities

CC

Retained earnings

2

June 30, 2010

 

 

 

 

3

Dec. 31, 2010

 

 

 

 

Shareholders’ equity

 

 

Assets

Liabilities

CC

Retained earnings

4

June 30, 2011

 

 

 

 

5

Dec. 31, 2011

 

 

 

 

 

Part B: For each item, write in the amount (even if $0) as of or for the Year Ended December 31, 2009, 2010, and 2011 in the column of the one financial statement where each amount is found.

 

2009:

 

Amount

Financial

5.

Mortgage payable

 

 

6.

Interest expense

 

 

 

2010:

 

Amount

Financial

1.

Mortgage payable

 

 

2.

Interest expense

 

 

 

 

 

 

4.

Interest paid

 

 

 

2011:

 

Amount

Financial

5.

Mortgage payable

 

 

6.

Interest expense