On December 1, Year 1, Bradley Corporation incurs a 15-year $270,000 mortgage liability in conjunction with the acquisition of an office building. This mortgage is payable in monthly installments of $2,200, which include interest computed at the rate of 8% per year. The first monthly payment is made on December 31, Year 1.

How much of the first payment made on December 31, Year 1, represents interest expense?

a) $2,200

b) $1,800 c) $1,440 d) $400

Over the 15-year life of the mortgage, the total amount Bradley will pay for interest charges is: a) $270,000. b) $126,000. c) $330,000. d) $396,000.