Please assist on solving accounting problem Ed the Electrician needed some long-
ID: 2739764 • Letter: P
Question
Please assist on solving accounting problem Ed the Electrician needed some long-term financing and arranged for a $150, 030 20-year mortgage loan on December 31. 2009 The interest rate is 9% per year, with $16,000 (rounded) payments made at the end of each year, starting December 31, 2010. What is the amount of interest expense related to this loan for 2010? What amount of liability should appear on the December 31, 2010, balance sheet? What is the amount of interest expense related to this loan for 2011? What amount of liability should appear on the December 31, 2011, balance sheet? What is the amount of interest expense related to this loan for 2010? Begin by determining the formula you will use to calculate interest expense each year.______times______= interest expense Interest expense for 2010 is $______. What amount of liability should appear on the December 31, 2010, balance sheet? Determine the formula you will use to calculate the mortgage payable balance each year.______times______= New mortgage payable balance The mortgage payable liability that should appear on the December 31, 2010 balance sheet is $______. What is the amount of interest expense related to this loan for 2011? (Round your answer to the nearest whole dollar.) Interest expense for 2011 is $_________. What amount of liability should appear on the December 31, 2011. balance sheet? The mortgage payable liability that should appear on the December 31, 2011 balance sheet is $_________. Interest rate Payment amount Principal balance Interest rate Payment amount Principal balance Current mortgage payable balance Interest payment amount Mortgage principal Principal payment amount Current mortgage payable balance Interest payment amount Mortgage principal Principal payment amountExplanation / Answer
1. Interest expense for 2010 = Interest rate x Current mortgage payable balance
= 9% x 150000
= $13500
2. Principal amount paid in 2010 = 16000-13500 = $2500
New mortgage payable balance = Current mortagage payable balance - Principal payment amount = 150000 - 2500
= $147500
3. Interest expense for 2011 = Interest rate x Current mortgage payable balance = $147500 x 9% = $13275
4. Principal amount paid in 2010 = 16000-13275 = $2725
New mortgage payable balance = Current mortagage payable balance - Principal payment amount
= 147500 - 2725
= $144775