Question# 2In June 2002, John an employee of a building society received a loan of $4.0 million topurchase an apartment. The interest on the mortgage loan is 8% and the applicableprescribed rate is 20%. John has paid seven mortgage instalments of $40,000 per monthfrom the 1st of June to 31st December 2006 of which $26000 is interest and $14000 isprincipal. What is John's charge to tax (per annum) on his loan for the period December2002 to December 2004?

The part of an individual's or entity's income that is subject to taxation is referred to as taxable…

Answered: Question# 2 In June 2002, John an…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2. Smith family borrowed a large sum of money to purchase their family car. The interest rate on their loan was 5%. The lender agreed to the following repayment schedule, $5300 at the end of the first year and $5300 at the end of the second year. How much did Smith family borrow?
9.
None
Mr. Isidro borrowed P1,150,000.00 for the purchase of his car. If his monthly payment is P25,000.00 on a 5-year mortgage, what is the total amount of interest? a. 350 000 b. 360 000 c. 370 000 d. 380 000
Your brother's business obtained a 30-year amortized mortgage loan for $175,000 at a nominal annual rate of 7.4%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest tax deduction be for Year 1? a. $1,645.03 b. $14,539.98 c. $12,950.00 d. $11,825.05 e. $12,894.95
Elizabeth makes the following interest-free loans during the year. Assume that tax avoidance is not a principal purpose of any of the loans. The relevant Federal rate is 5% and that the loans were outstanding for the last six months of the year. Borrower's Net Borrower Amount Investment Income Purpose of Loan Richard $5,000 $800 Gift Woody $8,000 $600 Stock purchase Irene $105,000 $0 Purchase principal residence By how much do each of these loans increase Elizabeth's gross income? If an amount is zero, enter "0". a. Richard is not subject to the imputed interest rules because the $10,000 gift loan exception does apply. Elizabeth's gross income from the loan is $ 0 b. The $10,000 exception does not income producing apply to the loan to Woody because the proceeds were used to purchase assets. Although the $100,000 exception applies to this loan, the amount of imputed interest is 1,000 X.Incorrect is $ 0 ✓. c. None of the exceptions apply gross income from the loan is $ to the loan to…
Joy had a tax refund of 733.43 due. She was able to get her tax refund immediately by paying a finance charge of 43.08 What simple interest rate is Joy paying for this loan assuming the following are true? Assume 360 days in a year. a) The tax refund check would be available in 5 days. b) The tax refund check would be available in 10 days. c) The tax refund check would be available in 20 days.
Give only typing answer with explanation and conclusion Stephen Black purchased a home for $450,000. Northridge mortgage company has approved his loan application for a 25-year fixed rate loan at 8%. He agreed to pay 20% of the purchase price as a down payment. (a) How much was the down payment amount? (b) What was his monthly payment? (c) How much interest will they pay after
Solve B.
Q-4: Fay borrowed $5000 at an interest rate of 3% compounded quarterly. On the first, second, and third anniversaries of the loan, she made payments of $1500. What payment made on the fourth anniversary will extinguish the debt?
K The Nicols are buying a house selling for $345,000. They pay a down payment of $45,000 from the sale of their current house. To obtain a 20-year mortgage at a 4.5% interest rate, the Nicols must pay 2.5 points at the time of closing a) What is the amount of the mortgage? b) What is the cost of the 2.5 points? a) The amount of the mortgage is $ b) The cost of the 2.5 points on the mortgage is S C***
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