Paris Company Buys a Building on a Plot of Land

question 53

Multiple Choice

Paris Company buys a building on a plot of land for $100,000,paying $20,000 cash and signing a 20-year mortgage note for $80,000 at 6%.Monthly payments are $570.
-The first monthly payment was made in January,2013.After the first payment,what is the updated principal balance?

• A) $79,430
• B) $79,600
• C) $79,830
• D) $79,440

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Definitions:

Cash Dividends

Payments made by a company to its shareholders from its profits in the form of cash.

Newly Issued Stock

This refers to shares that a company offers for sale to the public for the first time, outside of the shares already trading on the stock market.

Dividend Reinvestment Plans

Programs offered by corporations that allow investors to automatically reinvest their cash dividends in additional shares of the company's stock on the dividend payment date.

Preferred Stock

A type of stock that typically pays dividends at a fixed rate and has priority over common stock in terms of dividend payments and assets in the event of liquidation.