In: Accounting
Kessel Company purchased a building and land with a fair market value of $550,000 (building, $350,000 and land, $200,000) on January 1, 2018. Kessel signed a 20-year, 6% mortgage payable. Kessel will make monthly payments of $3,940.37. Round to two decimal places. Explanations are not required for journal entries.
Requirements
Amount borrowed = $550,000
Annual interest rate = 6.00%
Monthly interest rate = 6.00%/12
Monthly interest rate = 0.50%
Period = 20 years or 240 months