On October 1, 2019, Gandalf, Inc. borrowed $330,000 to finance the purchase of a building. The...
On October 1, 2019, Gandalf, Inc. borrowed $330,000 to finance
the purchase of
a building. The terms of the mortgage require payments of $2,000 to
be made at
the end of every month with the first payment being due on October
31, 2019. The
length of the mortgage is thirty years, and the mortgage carries an
annual interest
rate of 6%. The amount of interest expense that Gandalf would
report on its 2019
income statement related to this mortgage is equal to:
Group of answer choices
A) $4,683.46
B) $4,848.48
C) $4,950.00
D) $4,755.85
E) $4,944.74
Homework Answers
Interest expense = $330,000 * 6% interest rate * 3 / 12
= $4,950
The answer is C.
Add Answer to:
On October 1, 2019, Gandalf, Inc. borrowed $330,000 to finance the purchase of a building. The...
On October 1, 2019, Gandalf, Inc. borrowed $330,000 to finance the purchase of a building. The...
On October 1, 2019, Gandalf, Inc. borrowed $330,000 to finance the purchase of a building. The terms of the mortgage require payments of $2,000 to be made at the end of every month with the first payment being due on October 31, 2019. The length of the mortgage is thirty years, and the mortgage carries an annual interest rate of 6%. The amount of interest expense that Gandalf would report on its 2019 income statement related to this mortgage is...
On October 1, 2019, Gandalf, Inc. borrowed $330,000 to finance the purchase of a building. The...
On October 1, 2019, Gandalf, Inc. borrowed $330,000 to finance the purchase of a building. The terms of the mortgage require payments of $2,000 to be made at the end of every month with the first payment being due on October 31, 2019. The length of the mortgage is thirty years, and the mortgage carries an annual interest rate of 6%. The amount of interest expense that Gandalf would report on its 2019 income statement related to this mortgage is...
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On December 31, 2019, Metlock Inc. borrowed $3,300,000 at 13% payable annually to finance the construction...
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Question 4 On December 31, 2019, Pronghorn Inc. borrowed $3,180,000 at 12% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $381,600; June 1, $636,000; July 1, $1,590,000; December 1, $1,590,000. The building was completed in February 2021. Additional information is provided as follows. 1. Other debt outstanding 10-year, 13% bond, December 31, 2013, interest payable annually 6-year, 10% note, dated December 31, 2017, interest...
Interest During Construction Matrix Inc. borrowed $1,100,000 at 8% to finance the construction of a new building for its own use. Construction began on January 1, 2019, and was completed on October 31, 2019. Expenditures related to this building were: January 1 $258,000 (includes cost of purchasing land of $150,000) May 1 310,000 July 1 450,000 October 31 280,000 In addition, Matrix had additional debt (unrelated to the construction) of $500,000 at 9% and $800,000 at 10%. All debt was...
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