Homework Answers
Correct answer-----------(B) a, b and c.
.
Liabilities for mortgage decrease by $50000 and interest expense increase expense for $2500 hence interest expense increase. Cash decrease for mortgage and interest payment so total asset decrease by (50000+2500) 52500.
| Principal repayment | $ 50,000.00 |
| Add: Interest paid ((50000*10%)/2) | $ 2,500.00 |
| Total cash payment | $ 52,500.00 |
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