HTML Preview Mortgage Payment Schedule page number 1.
Principle 37,000.00$
Interest on Mortgage 4%
Term 5 years
Annual Mortgage Payment $8,311.20 per year
Total Interest
Expense
Total Mortgage
Repayment
Total Paid
(Int. + Principle)
Principle Interest
Principle
Repayment
Total
Payment
Ending
Principle
1 37,000.00
2
3
4
5
Principle: 70,000$
Stated Rate: 10%
Based on a market value of:
Market Rate:
12%
Year
Interest Plus
Principle
Received
Discounting
Factor
P
resen
t
Value of
Cash to be
Received
New Cash
Generated
A
verage
A
c
t
ua
l
Interest Rate
(Based on Price
PAID for Bond)
1
2
3
4
5
MARKET VALUE OF BOND:
Instructions:
Complete both schedules and make the following journal entries.
For the Mortgage:
1. Record the first year's Mortgage payment on December 31 of this year.
2. Record the last year's Mortgage payment on December 31.
For the Bond Issue:
3. Record the issue of the Bond on January 1st of this year.
4. Record the payment of interest on December 31st of this year.
5. On September 30th of year 2, the owner redeems Bond for 71,000.00$
OVER THE 5 YRS:
(sum of all discounted cash flows) (average of the 5 years of effective return)
Mortgage Payment Schedule
Over the Term of the Mortgage:
Bond Valuation - Discounting Future Cash Flows