Mortgage Question**Hard**

[Reubin]

Hi Im currently studying Senior Bookkeeping - Financial statements, (Part-Time) and have run into a question i cant answer.
The Textbook doesnt seem to have any examples regarding it either. The question i have is taken from a Sample Assessment similar to the one
i will receive in my examination. So i need to understand how they came to the solution, i have approached 2 accountants and a lecturer, unfortunately they couldnt help me either. so here i am....

Question:

Provide for the Interest on the Mortgage Loan. Interest is calculated at 12% per Annum. The liability was repaid (redeemed) by
R50 000 on 1 June 2006. There we no additional loans or repayments during the financial year. But twelve end-of month instalments of R1650
each are due to be repaid on the loan starting at the end of February 2007.

Additional Info.

The Mortgage loan: R180000
(It doesnt say when the loan was initiated but Land & Buildings is R187500).

Under the Proposed Solution
General Journal
Incrued Expense R23 600

My Question is how did they come to that solution?
Please help!!!!

[CLIVE-TRIANGLE]

Hi Reubin, it's pretty much the same as this one:
http://www.theforumsa.co.za/forums/s...light=interest

[Reubin]

I got the answer from a Lecturer yesterday!

R180000 + R50000 (March - June) x 4/12 x 12% = R9200
R180000 (July - Feb) x 8/12 x 12% = R14400
R14400
+R9200
=R23600 Solved!