Question

Sheridan Electronics issues a $361,000, 3%, 15-year mortgage note on December 31, 2019. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provide for annual installment payments, exclusive of real estate taxes and insurance, of $42,320. Payments are due on December 31. (a) Prepare an installment payments schedule for the first 4 years. (Round answers to 0 decimal places, e.g. 15,250.) Annual Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance Issue Date

Answer 1

Solution

Annual Interest period	Cadh payment	Interest expense	Reduction in Principal	Principal Balance
Issue date				361000
1	$        30,240	$        10,830	$        19,410	$           341,590
2	$        30,240	$        10,248	$        19,992	$           321,598
3	$        30,240	$          9,648	$        20,592	$           301,006
4	$        30,240	$          9,030	$        21,210	$           279,797

I have not rounded intermediate calculations so if the any amount is incorrect it will be because of round off. Provide round off information if available in comment section.

Loan amount	$        361,000
PV Annuity for 15 years @ 3%	11.937935087
Annual installment	$          30,240