You Have a Line of Credit Loan with the Bank

question 52

Essay

You have a line of credit loan with the Bank of Hong Kong. The initial loan balance was $7000.00. Payments of $3000.00 and $2500.00 were made after four months and ten months respectively. At the end of one year, you borrowed an additional $4250.00. Seven months later, the line of credit loan was converted into a collateral mortgage loan. What was the amount of the mortgage if the line of credit interest was 8.52% compounded monthly?

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Definitions:

Material Errors

Substantial mistakes or omissions in accounting records that could influence the decision of someone relying on that information.

Financial Statements

Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.

Owner Financing

A financing arrangement where the seller extends credit to the buyer to purchase the seller's property.

Shares

Units of ownership in a company, representing a proportion of the corporation's capital, giving the shareholder a right to its profits.