Homework Answers
| 2307941 | ||||||||
| 1369651 | ||||||||
| Date | Account titles and explanations | Debit | Credit | |||||
| 01-Jan-20 | Investment property Dr. | $1,500,000 | ||||||
| Account payable(promisory note) | $1,500,000 | |||||||
| (Investment property purchased) | ||||||||
| 01-Jan-20 | Land Dr. | $2,646,646 | ||||||
| 9 % Mortgage loan | $2,646,646 | |||||||
| (land aquired by taking loan) | ||||||||
| Years | Cashflow | Discounted Cashflow@11% | ||||||
| 1 | $270,000 | $243,243 | (270,000/(1.11)^1) | |||||
| 2 | $270,000 | $219,138 | (270,000/(1.11)^2) | |||||
| 3 | $270,000 | $197,422 | (270,000/(1.11)^3) | |||||
| 4 | $270,000 | $177,857 | (270,000/(1.11)^4) | |||||
| 5 | $270,000 | $160,232 | (270,000/(1.11)^5) | |||||
| 6 | $270,000 | $144,353 | (270,000/(1.11)^6) | |||||
| 7 | $270,000 | $130,048 | (270,000/(1.11)^7) | |||||
| 8 | $270,000 | $117,160 | (270,000/(1.11)^8) | |||||
| 9 | $270,000 | $105,550 | (270,000/(1.11)^9) | |||||
| 10 | $3,270,000 | $1,151,643 | (3,270,000/(1.11)^10) | |||||
| $2,646,646 | ||||||||
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