Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On April 2 , 2 0 2 0 , shortly after the $ 7 . 5 million deposit outflow, Key Bank had borrowed the needed

On April 2,2020, shortly after the $7.5 million deposit outflow, Key Bank had borrowed the needed fund in the fed funds market to cover the shortfall in
reserves for the remainder of the month (29 days, from 42 to 430). The required yield on a discount basis was 1.5%.
On April 30,2020, Key Bank finally received the first required payments from its mortgages, loan, and T-bills, and it also paid off its fed funds loan. Key Bank
was required to establish a loan loss reserve at 0.5% of the commercial loan value and the bank was in the 35% tax bracket. The bank had not engaged in any
off-balance-sheet activities.
The following accounting entries record these cash flow transactions.
Accounting entries for mortgages and loan.
Accounting entries for T-bills.
Accounting entries for fed funds loan.
Question: What was the dollar amount of (a) interest income from mortgages and (b) reduction in mortgage loan balance as of April 30,2021?
$210,000.00;$74,487.05
$150,000.00;$134,487.05
$250,000.00;$124,476.04
$189,900.00;$210,136.80
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Health Care Finance Basic Tools For Nonfinancial Managers

Authors: Judith J. Baker, R.W. Baker

4th Edition

1284029867, 978-1284029864

More Books

Students also viewed these Finance questions

Question

In Problem find the domain and intercepts. 5 + x f(x) 4 - x ||

Answered: 1 week ago