Level Payment Mortgage - January 1, 2016 Big Rip Company 8 Rip purchased an existing commercial property for $2,000,000. They paid 10% $200,000) down and financed the balance with a 15 year level payment mortgage. The vank agreed to provide the $1,800,000, but would charge $25,000 in loan fees, thus the amount of the loan would be $1,825,000. The stated interest annual rate is 4% with quarterly payments of $40,596.12 starting March 31, 2016. The check from the bank was for $1,800,000. Quick recorded the purchase and loan as follows: Land 400,000 Building includes $25,000 bank loan fees) 1,625,000 200.000 Cash 1,825,000 Mortgage payable Quick then made the following identical entries on March 31, June 31. Sept. 30 and Dec. 31, 2016: 40,596.12 Mortgage payable Cash 40,596.12 Required: 1. Prepare an amortization schedule based on the stated loan amount of $1,825,000 and the stated 1% (4/4) quarterly interest rate. Be sure to make it a quarterly payment table. You can run only as far as Dec 31, 2018, but with Excel, why not run to the end? 2. Calculate the effective interest rate based on a true present value of $1,800,000 3. Prepare an effective interest rate amortization schedule using the new PV and the quarterly rate you calculated above. You can run only as far as Dec. 31, 2018, but with Excel, why not run to the end? 4. Prepare the correct entries that should have been made during January 1 and Dec. 31 of 2016. 5. Suppose that the loan is paid off after 3 years (12 periods), make the entry to record the retirement. For extra credit, calculate the effective rate based on when the loan was paid off. Level Payment Mortgage - January 1, 2016 Big Rip Company 8 Rip purchased an existing commercial property for $2,000,000. They paid 10% $200,000) down and financed the balance with a 15 year level payment mortgage. The vank agreed to provide the $1,800,000, but would charge $25,000 in loan fees, thus the amount of the loan would be $1,825,000. The stated interest annual rate is 4% with quarterly payments of $40,596.12 starting March 31, 2016. The check from the bank was for $1,800,000. Quick recorded the purchase and loan as follows: Land 400,000 Building includes $25,000 bank loan fees) 1,625,000 200.000 Cash 1,825,000 Mortgage payable Quick then made the following identical entries on March 31, June 31. Sept. 30 and Dec. 31, 2016: 40,596.12 Mortgage payable Cash 40,596.12 Required: 1. Prepare an amortization schedule based on the stated loan amount of $1,825,000 and the stated 1% (4/4) quarterly interest rate. Be sure to make it a quarterly payment table. You can run only as far as Dec 31, 2018, but with Excel, why not run to the end? 2. Calculate the effective interest rate based on a true present value of $1,800,000 3. Prepare an effective interest rate amortization schedule using the new PV and the quarterly rate you calculated above. You can run only as far as Dec. 31, 2018, but with Excel, why not run to the end? 4. Prepare the correct entries that should have been made during January 1 and Dec. 31 of 2016. 5. Suppose that the loan is paid off after 3 years (12 periods), make the entry to record the retirement. For extra credit, calculate the effective rate based on when the loan was paid off