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Flatley Inc. made a purchase on October 1, 20x7 of a new building for $853,000. They put 25% down and took out out at 30
Flatley Inc. made a purchase on October 1, 20x7 of a new building for $853,000. They put 25% down and took out out at 30 year, 8.25% mortgage on the balance. Flatley had the building and land appraised and was given a value on a value on the building of $785,000 and on the land $95,000. | |||||||||||||||
| Total cost | You must prorate the selling price to the land & building. If you do not know how to do this look in the index of the financial book to find where it is covered and then read the material on how to do this. It is not difficult. | ||||||||||||||
| Appraised building value | |||||||||||||||
| Appraised land value | |||||||||||||||
| Total appraised value | |||||||||||||||
| % down on mortgage | |||||||||||||||
| Dollar amount down | c. | Record the first three necessary journal entries. | |||||||||||||
| Amount of loan | |||||||||||||||
| Length of loan in year | 20x7 | ||||||||||||||
| Number of loan payments | |||||||||||||||
| Interst rate | |||||||||||||||
Use an online payment calculator or the pymt formula in Excel. | |||||||||||||||
| a. | The monthly mortgage payment | ||||||||||||||
| b. | Chart showing the payments for the next 12 months | ||||||||||||||
| New | |||||||||||||||
| Total | Monthly | Interest | Principal | Liability | |||||||||||
| Payment | Liability | Payment | Expense | Payment | Balance | ||||||||||
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