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Calculate the value of the mortgage

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Reference no: EM132440491

On January 1, 2020, Blue Spruce Corporation acquired the following properties:

  1. Vacant land in Rome, Italy for $4 million. To finance this transaction, Blue Spruce Corporation obtained a 8% mortgage for the full purchase price, secured by the land, with a maturity date of January 1, 2030. Interest is payable annually. If Blue Spruce Corporation borrowed this money from the bank, the company would need to pay 10% interest.

Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the value of the mortgage. Using the calculation from the tables, record Blue Spruce Corporation's journal entries on January 1, 2020, for each of the purchases

Reference no: EM132440491

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