Emily, Bev, and Doug had originally thought that the computer equipment upgrade that ABC decided to undertake could be paid for with cash in the bank. As at June 25, 2021, the balance of the 5% mortgage payable after making the payment on that day was $39,246. Monthly principal and interest instalment payments are $548, paid on the 25th of each month. The mortgage is up for renewal on November 25, 2021. Because interest rates have fallen since the original mortgage was signed, it can be renewed at an interest rate of 4%. In addition, Emily has decided to reduce the mortgage term to five years, instead of the seven years remaining. Unfortunately, there was not enough cash to pay for the computer equipment as originally planned, and $20,000 of the operating line of credit had to be used to finance this upgrade. Emily would like to transfer the balance of the line of credit onto the mortgage payable balance outstanding instead of trying to pay the balance owed on the line of credit from cash generated from operations. The bank has agreed to accommodate both of these requests and has advised that the monthly instalment payments will be $1,055 for the combined amounts and revised term, with payments starting on December 25, 2021. (a) Your answer is correct. If the amount of mortgage owing was $39,246 on June 25, and instalment payments are $548 per month as indicated above, what is the amount of the mortgage owing at November 25, 2021, after making the payment on that date, immediately before it is renegotiated? (Round answer to 0 decimal places, e.g. 5,275.) Amount of the mortgage owing at November 25, 2021 $ 37307.54 (d) Your answer is partially correct. Record the first two instalment payments for December 25, 2021, and January 25, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit First Installment Payment 2021 Dec. 25 interest expense cash Second Installment Payment 2022 Jan. 25 interest expense cash Emily, Bev, and Doug had originally thought that the computer equipment upgrade that ABC decided to undertake could be paid for with cash in the bank. As at June 25, 2021, the balance of the 5% mortgage payable after making the payment on that day was $39,246. Monthly principal and interest instalment payments are $548, paid on the 25th of each month. The mortgage is up for renewal on November 25, 2021. Because interest rates have fallen since the original mortgage was signed, it can be renewed at an interest rate of 4%. In addition, Emily has decided to reduce the mortgage term to five years, instead of the seven years remaining. Unfortunately, there was not enough cash to pay for the computer equipment as originally planned, and $20,000 of the operating line of credit had to be used to finance this upgrade. Emily would like to transfer the balance of the line of credit onto the mortgage payable balance outstanding instead of trying to pay the balance owed on the line of credit from cash generated from operations. The bank has agreed to accommodate both of these requests and has advised that the monthly instalment payments will be $1,055 for the combined amounts and revised term, with payments starting on December 25, 2021. (a) Your answer is correct. If the amount of mortgage owing was $39,246 on June 25, and instalment payments are $548 per month as indicated above, what is the amount of the mortgage owing at November 25, 2021, after making the payment on that date, immediately before it is renegotiated? (Round answer to 0 decimal places, e.g. 5,275.) Amount of the mortgage owing at November 25, 2021 $ 37307.54 (d) Your answer is partially correct. Record the first two instalment payments for December 25, 2021, and January 25, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit First Installment Payment 2021 Dec. 25 interest expense cash Second Installment Payment 2022 Jan. 25 interest expense cash
