On 1 April 2019, Exotica Ltd borrowed $56,870 from the bank at 10% per annum interest....

On 1 April 2019, Exotica Ltd borrowed $56,870 from the bank at 10% per annum interest. This loan was a secured loan and is was for one year. This loan is repayable in amounts of $5,000 at the end of each month. Required 1. In an excel spreadsheet prepare a journal entry to record the initial mortgage (1 mark). 2. Within the Excel spreadsheet prepare a mortgage schedule for this loan. Round your calculations to two decimal places and the nearest dollar 3. In the Excel spreadsheet, use the mortgage schedule to prepare the journal entries for loan repayments for April and May 2019 .

Expert Solution

Loan amortization schedule [ in $]

Months	Opening balance	payment	principal	Interest	Balance
1	56,870.00	5,000.00	4,526.08	473.92	52,343.92
2	52,343.92	5,000.00	4,563.80	436.20	47,780.12
3	47,780.12	5,000.00	4,601.83	398.17	43,178.28
4	43,178.28	5,000.00	4,640.18	359.82	38,538.10
5	38,538.10	5,000.00	4,678.85	321.15	33,859.25
6	33,859.25	5,000.00	4,717.84	282.16	29,141.41
7	29,141.41	5,000.00	4,757.15	242.85	24,384.26
8	24,384.26	5,000.00	4,796.80	203.20	19,587.46
9	19,587.46	5,000.00	4,836.77	163.23	14,750.69
10	14,750.69	5,000.00	4,877.08	122.92	9,873.61
11	9,873.61	5,000.00	4,917.72	82.28	4,955.89
12	4,955.89	5,000.00	4,955.89	44.11	0.00
	Total	60,000.00	56,870.00	3,130.00	0

Interest = Opening balance*10%
Principle = Total payment for the month- Interest.
Ending balance = Opening balance -Principle
Total payament = Principal +Interest
Total Interest paid = Total Repayment - Principal
=$60,000- $56,870
= $3,130

For the April month calculation is made as follows.

Interest = Principal * Interest

= $ 56870*0.10/12

= $473.92

Principal = $5000- $473.92

=$4526.08

Ending principal = $56870-$4526.08

=$52343.92

In the same way calculation is made for remaining months.

Journal entries are as follows.

JOURNAL ENTRIES IN THE BOOKS OF EXOTICA LTD
Date	particulars	DR	CR
01.01.2020	Bank A/c…………………………………………………………..DR	$56870
	To Secured loan A/c		$56870
	[ Being loan amount Disbursed ]

30.04.2020	Interest on loan A/c………………………………………….DR	359.82
	Secured Loan A/c……………………………………………….DR	4,640.18
	To Bank A/c		5,000.00
	[ Being payment of loan is made along with interest for the month of April]

30.05.2020	Interest on loan A/c………………………………………….DR	321.15
	Secured Loan A/c……………………………………………….DR	4,678.85
	To Bank A/c		5,000.00
	[ Being payment of loan is made along with interest for the month of May]

Dear students kindly like my answer if you are satisfied with the answer and if you are disliking it let me know the reason in the comment section so that i will be able to provide you the information as you expect in the future.

ekkarill92 answered 1 year ago

Under the terms of an interest swap, a bank has agreed to pay 10% per annum...

Under the terms of an interest swap, a bank has agreed to pay 10% per annum and receive three-month LIBOR in return on a notional principal of $100 million with payments being exchanged every three months. The swap has a remaining life of 11 months. The average of the bid and offer fixed rates currently being swapped for three-month LIBOR is 12% per annum for all maturities. The three-month LIBOR rate one month ago was 11.8% per annum. All rates...

P2000 is borrowed for 105 days at 12% per annum simple interest. How much will be...

P2000 is borrowed for 105 days at 12% per annum simple interest. How much will be due at the end of 105 days? Simple Interest

The Bank quotes the interest rate on loans as 12% per annum continuously compounded. The interest...

The Bank quotes the interest rate on loans as 12% per annum continuously compounded. The interest is actually paid monthly on a $6911 loan. What is the interest payment (in $) of this loan per month?

Bank Monash quotes the interest rate on loans as 5% per annum continuously compounded. The interest...

Bank Monash quotes the interest rate on loans as 5% per annum continuously compounded. The interest is actually paid monthly on a $3752 loan. What is the interest payment (in $) of this loan per month? p.s That's the whole problem. It didn't provide any info about the duration.

Mr. Smart borrowed $25,000 from a bank on annuity for 2 years at 10% annual interest...

Mr. Smart borrowed $25,000 from a bank on annuity for 2 years at 10% annual interest compounded and payable semiannually (every six months). Calculate the semiannual payments and provide a table that shows periodic payment, balance, interest payment, payment to principal for each payment as well as total amount which Mr. Smart will pay to the bank for the borrowed amount including interest and principal payments in the entire period of two years.

Tim Company borrowed $150,000 from a local bank on January 1, 2019.The loan is a...

Tim Company borrowed $150,000 from a local bank on January 1, 2019. The loan is a 5-year note payable that requires semi-annual payments of $24,000 every June 30 and December 31, beginning June 30, 2019. Assume the loan has a 20% interest rate, compounded semi-annually. Calculate the amount of the note payable at December 31, 2019 that would be classified as a long-term liability.

Suppose you have $150,000 in a bank term account. You earn 5% interest per annum from...

Suppose you have $150,000 in a bank term account. You earn 5% interest per annum from this account. You anticipate that the inflation rate will be 3% during the year. However, the actual inflation rate for the year is 6%. 1. Calculate the impact of inflation on the bank term deposit you have. ii. Examine the effects of inflation in your city of residence with attention to food and accommodation expenses. iii. The Australian Bureau of Statistics (ABS) reported in...

In an interest rate swap offered by a bank, Company A could pay 3.5% per annum...

In an interest rate swap offered by a bank, Company A could pay 3.5% per annum and receive six-month LIBOR in return on a notional principal of $100 million with payments being exchanged every six months. The swap has a remaining life of 16 months. Six-month forward LIBOR for all maturities is currently 3.8% per annum. The six-month LIBOR rate two months ago was 3.2% per annum. OIS rates for all maturities are currently 3.0% with continuous compounding. All other...

. Ali borrowed Rs.550,000 from a bank on terms of 12 year, 10% nominal interest rate....

. Ali borrowed Rs.550,000 from a bank on terms of 12 year, 10% nominal interest rate. The loan calls for quarterly payments. a) Calculate the amount of quarterly payment you would be paying every period? b) How much is the total amount of interest that Ahmed has paid in two years? What is the ending balance of principal after two years?

On January 1, 2019, ABC Company borrowed $120,000 from the bank. The loanis a 7-year...

On January 1, 2019, ABC Company borrowed $120,000 from the bank. The loan is a 7-year note payable that requires annual payments of $24,500 every December 31, beginning December 31, 2019. Assume the loan has an interest rate of 10% compounded annually. Calculate the amount of the note payable at December 31, 2020 that wouldbe classified as a current liability.

Question