Question
It is 1/1/2024, Djokovic has purchased a building for $1 million and taken a 30-year mortgage. Djokovic can afford a down payment 20%. Payments are
It is 1/1/2024, Djokovic has purchased a building for $1 million and taken a 30-year mortgage.
Djokovic can afford a down payment 20%. Payments are yearly at the end of each year in equal amounts, starting on 12/31/2024. The interest rate is 8%.
A) Write the journal entry to record the purchase of the building on 1/1/2024.
B) Calculate the payment to be made at the end of each year. (show work for partial credit)
C) Write the journal entry that records the first payment on 12/31/2024.
D) Imagine Djokovic just had a windfall of cash, and wants to pay off the mortgage on 1/1/2025. What is the lump sum value to pay off?
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