On December 1, Year 1, Bradley Corporation incurs a 16-year $180,000 mortgage liability in conjunction with the acquisition of an office building. This mortgage is payable in monthly installments of $1,200, which include interest computed at the rate of 5% per year. The first monthly payment is made on December 31, Year 1.
1. Required information
The total liability related to this mortgage reported in Bradley's balance sheet at December 31, Year 1, is:
$180,000.$179,550.$96,000.$178,800.
2. Required information
Compute the total amount to be paid by Bradley over the 16-year life of the mortgage.
$180,000.$241,920.$230,400.$199,200.
3. Required information
How much of the first payment made on December 31, Year 1, represents interest expense? (Do not round intermediate calculations.)
$450.$1,200.$563.$750.
4. Required information
The total liability related to this mortgage reported in Bradley's balance sheet at December 31, Year 1, is:
$180,000.$179,550.$96,000.$178,800.
5. Required information
Over the 16-year life of the mortgage, the total amount Bradley will pay for interest charges is:
$50,400.$230,400.$180,000.$192,000.