This Year,Mr

question 23

Multiple Choice

This year,Mr.and Mrs.Franklin paid $93,000 interest on a mortgage incurred in 2008 to build their home in Santa Fe.The average principal balance of the mortgage was $1.43 million.The home has an appraised FMV of only $1.2 million.Compute the Franklins' itemized deduction for their home mortgage interest.

• A)$65,035
• B)$58,531
• C)$93,000
• D)None of the above

---

Definitions:

Average Total Assets

The mean value of all the assets a company owns, calculated over a specific period of time, typically used to assess company size or efficiency.

Prepaid Rent

Prepaid rent refers to payments made for rent in advance before it is due, recorded as an asset on the balance sheet until the period to which it applies passes.

Stockholders' Equity

Represents the residual interest in the assets of a corporation after deducting liabilities, which is the ownership interest of shareholders in a company.

Expenses

The outflow of money to another person or company to pay for an item or service, or for a category of costs.