Paris Company buys a building on a plot of land for $100,000, paying $20,000 cash and signing a 20-year mortgage note for $80,000 at 6%. Monthly payments are $570. What portion of the first monthly payment is interest expense? A. $4,800 B. $570 C. $550 D. $400

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1EB: Sharapovich Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the...
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What portion of the first monthly payment is interest expense of this financial accounting question?

Paris Company buys a building on a plot of land for $100,000, paying $20,000 cash and
signing a 20-year mortgage note for $80,000 at 6%. Monthly payments are $570.
What portion of the first monthly payment is interest expense?
A. $4,800
B. $570
C. $550
D. $400
Transcribed Image Text:Paris Company buys a building on a plot of land for $100,000, paying $20,000 cash and signing a 20-year mortgage note for $80,000 at 6%. Monthly payments are $570. What portion of the first monthly payment is interest expense? A. $4,800 B. $570 C. $550 D. $400
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