Explain how to account for the mortgage payment

Assignment Help Accounting Basics
Reference no: EM133025477

Question - Bonnie's Family is a non-profit organization which assists families with low-income, special needs children, or are victims of domestic violence. They have a 30 year mortgage with a 5% interest rate which requires a payment of $3,000 per month. In preparing the financial statements for the board, you list the mortgage balance of $287,000 as a current liability based on the board hoping to pay it off within the next year. If Bonnie's pays according to the mortgage agreement, only $20,000 will be paid in the next year. The board asks an independent CPA to advise how to report the mortgage on the balance sheet.

-Explain how to account for the mortgage payment based on U.S. GAAP, assuming the board feels they will pay the entire balance in the next year.

-Provide supporting information and necessary citations to the accounting for the mortgage on the balance sheet for your response to requirement 1.

Reference no: EM133025477

Questions Cloud

What is meaning of the term equivalent units of production : Question - What is the meaning of the term equivalent units of Production (EUP)? What trying to determine when the apply EUP
What type of financing resource is archie using : Archie needs funding to start his dog walking business, so he takes out a bank loan that is secured against his home. What type of financing resource is Archie
Prepare schedule that shows amount of compensation expense : Prepare a schedule that shows the amount of compensation expense allocable to each year affected by the stock-appreciation rights plan
Application of hash partitioning : What is the application of Hash partitioning and its advantages?
Explain how to account for the mortgage payment : Explain how to account for the mortgage payment based on U.S. GAAP, assuming the board feels they will pay the entire balance in the next year
Survival gear for sale on web site : Wilderness Trailhead, Inc. (WTI) is a retailer that offers hiking, rock-climbing, and survival gear for sale on its Web site.
Derive the effective marginal tax rate : Derive the effective marginal tax rate and calculate the increase in annual after-tax profits if the higher transfer price of $2,138 per unit is used
Explain how an arbitrageur can design a strategy : Question - Refer the following information: Spot Rate of £ = $1.39, 90-day forward rate of £ = $1.47, Explain how an arbitrageur can design a strategy
Conduct a scenario analysis for the cases specified : Conduct a scenario analysis for the 5 cases specified. What is the NPV in each scenario? What is the expected (i.e. probability-weighted) NPV

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd