Fully amortizing installment note payable (mortgage)
On October 31, 2009, Seldon Company incurs a 30-year $600,000 mortgage liability in conjunction with the purchase of a motel. This mortgage is payable in equal monthly installments of $6,485, which include interest computed at an annual rate of 12%. The first monthly payment is made on Determining cost of plant assets
New equipment was purchased by Hunter Corporation at a list price of $94,000. Payment included $7,800 sales tax in addition to the purchase price. The company also paid delivery charges of $940 and labor costs of $1,380 for installing the new equipment at the appropriate location. During installation, an inexperienced employee punctured several containers with a forklift, causing damage to the equipment. Cost to repair the damage was $1,960.
a) What is the total cost of Hunter's equipment?
b) Using the Double Declining Balance method, half-year convention, 10 year life, what is the depreciation expense for Year 1, 2 & 3?
c) Using the Straight-line Method, half-year convention, 8 year life, what is the depreciation expense for Year 1, 2 and 3?
Show all computations.





(a) With respect to this mortgage, Seldon's 2009 income statement includes interest expense of $_______________, and Seldon's balance sheet at December 31, 2009, includes a total liability for this mortgage of _______________. (Do not separate into current and long-term portions.)
(b) The aggregate monthly cash payments Seldon will make over the 30-year life of the mortgage amount to $_______________.
(c) Over the 30-year life of the mortgage, the amount Seldon will pay for interest amounts to $_______________.