What is the total amount of interest that was paid

Assignment Help Financial Accounting
Reference no: EM132735854

Problem - Assume that your aunt sold her house on December 31, and to help close the sale she took a second mortgage in the amount of $10,000 as part of the payment. The mortgage has a quoted (or nominal) interest rate of 10%; it calls for payments every 6 months, beginning on June 30, and is to be amortized over 10 years. Now, 1 year later, your aunt must inform the IRS and the person who bought the house about the interest that was included in the two payments made during the year. (This interest will be income to your aunt and a deduction to the buyer of the house.) To the closest dollar, what is the total amount of interest that was paid during the first year?

Reference no: EM132735854

Questions Cloud

Consider importance of visuals in connecting with audience : Consider the importance of visuals in connecting with an audience. Discuss a moment or experience in your life when a picture, drawing or other visual
Calculate depreciation expense for the final year : Using straight-line depreciation, calculate depreciation expense for the final (partial) year of service. Aaron Company purchased equipment at a cost of $140,00
What fraction of the payment made at the end of second year : Your company is planning to borrow $1 million on a 5-year, 15%, annual payment, What fraction of the payment made at the end of second year
Find what is the selling price of the product : Find what is the selling price of this product, If Bluegreen's markup percentage on variable cost is 25% and its gross margin is 26%.
What is the total amount of interest that was paid : The mortgage has a quoted (or nominal) interest rate of 10%; what is the total amount of interest that was paid during the first year
Introduction should appropriately integrate : Your introduction should appropriately integrate/include the various suggestions for writing introductions described in your text. Thesis statement:
Find the production department planning budget for the month : Find the Production Department's planning budget for the month. Packaging Solutions Corporation manufactures and sells a wide variety of packaging products.
What would happen to the present value of the perpetuity : If interest rates in general were to double and the appropriate discount rate rose to 14%, what would happen to the present value of the perpetuity
Advantages and disadvantages of the balanced scorecard : Discuss the advantages and disadvantages of the balanced scorecard. Do you use this type of monitoring tool in your organization?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Break-even point in units and sales dollars

Determine Cove’s break-even point in units and sales dollars. (Round your Break-Even Units answer to the nearest whole number. Round your other intermediate calculations and sales dollars answer to 2 decimal places.)

  Departments are involved in the dishwashers manufacture

One of Sun Appliance's products is a dishwasher. Two processing departments are involved in the dishwasher's manufacture. The tub is assembled in one department, and a second department assembles and installs the motor. There is no beginning or endin..

  Key estimates used by AGL in conducting impairment testing

From your firm's annual report find out the asset/s that your firm has tested for impairment - Has your firm recorded any impairment expenditures during

  What will the firm return on equity be next year

What will the firm's return on equity be next year if net income from business operations remains the same but it borrows $120000 returning the same amount

  Porter corporation''s capital structure

Porter Corporation's capital structure consists of 50,000 shares of common stock. On December 31, 2012, an analysis of the accounts and discussions with company officials revealed the following information:  Sales revenue $1,100,000 Purchase discou..

  Short run decision analysis and capital budgeting

How do managers use the concept of cost-benefit during the evaluating phase of the management process? How do managers use the concept of cost-benefit during the communicating phase of the management process?

  Discuss return on investment capital

Discuss Return on Investment Capital and how its composition affects how profitability is measured as the return on operating capital of companies.

  The bonds would have a stated interest rate

Assume that P & P wants to build a new warehouse. The CFO has stated that the building will cost $1.5 million. She has asked you to determine the dollar amount of bonds that P & P would have to issue to cover this cost, assuming that the bonds would ..

  What the value of whispering winds corp inventory

Whispering Winds Corp. uses the average cost method. What the value of Whispering Winds Corp.'s inventory at May 31, 2022 is?

  Compute the depreciable cost

Compute the depreciable cost. Compute the depreciation expense for Year 1 under the double-declining method. (Round your answer to 2 decimal places.)

  Determine the inventory cost by the last-in first-out method

Determine the inventory cost by the weighted average cost method. Determine the inventory cost by the last-in, first-out method

  Determining the project npv-irr in mirr

The project cost of capital is 10 per cent . what is the project pay back period, what is the project NPV, what is the project IRR in MIRR

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