3. Moore Realty just completed the purchase of an apartment complex on August 1

Question

3. Moore Realty just completed the purchase of an apartment complex on August 1 for $100,000 down and an 11%, 20-year, $400,000 mortgage note. The note requires monthly principal andinterest payments of $4,129, with interest computed on the unpaidnote balance. The entry to record the September 1 payment would be 4,129 Mortgage Note Payable Cash 4,129 2,064 2,065 Interest Expense Mortgage Note Payable Cash 4,129 454 3,667 C. Interest Expense Mortgage Note Payable Cash 4,129 3,667 462 d. Interest Expense Mortgage Note Payable Cash 4,129 4. On March 1 , 19X4, Grand Junction Railroad issued $50,000 of 8%, 10-year bonds dated March 1 for $43,769. Interest is payable on March 1 and September1. If Grand Junction uses the straight-line method ofamortization, how would these bonds appear on the September 1, 19X4, balance sheet? (Round all calculations to the nearest dollar.) Long-term liabilities: a. 50,000 Bondspayable Less: Discount on bondspayable31 $43,769 Long-term liabilities: $43,769 Bondspayable Plus: Discount on bonds payable6231 S50,000 Long-term liabilities: S50,000 Bondspayable Less: Discount on bondspayable 5919 $44,081 d. Long-term liabilities: $44,081 Bondspayable Plus: Discount on bondspayable 5919 S50,000

Explanation / Answer

3) interest expense = 400,000*11%*1/12 3667 mortgage paid 4129-3667 462 Journal Entry Accounting titles & Explanations Debit Credit Mortgage payable 462 interest expense 3667 cash 4129 option D is the correct option 4) Discount on bonds = 50,000-43,769 6231 amortized = 6231/20 311.55 long term liabilities bonds payable 50,000 less:discount on bonds 5919 (6231-312) 44081 option c is the correct answer

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