What are the debits and credits for this series

Assignment Help Accounting Basics

Reference no: EM132723008

Question - A-1) New Century originated high-risk mortgage loans, which they sold to investors with repurchase agreements. Let us assume the following series of transactions:

1) Originated $80 million in loans drawing on credit, with a 1.25% origination fee.

2) Sold the loans to investors for $82 million in cash, paying off the line drawn on to originate the loans.

3) Repurchased 40% of the origination from investors, drawing on credit, and now held for investment. NC paid investors a 2.5% premium on the repurchase.

4) 20% of the repurchased origination was in severe default and required an immediate write-off. At the beginning of the year, NC had set-up an allowance for "held for investment" write-offs.

Required - What are the debits and credits for this series of typical transactions for NC?

Reference no: EM132723008

Questions Cloud

Find the probability that the number : Find the probability that the number who consider themselves baseball fans is? (a) exactly? five, (b) at least? six, and? (c) less than four.

What is the total amount that is included in l net income : What is the total amount that is included in L's net income for tax purposes in the current year with respect to the sale of the franchise

What journal entries would be if applicable on march : On March 25, 2015, SEAF signed a service contract. What Journal Entries would be, if applicable, on the dates March 25, 2015, April 30, 2015, May 10, 2015

What is a rate of exchange : 1. What is a rate of exchange? 2. How important is foreign exchange in international trade?

What are the debits and credits for this series : Originated $80 million in loans drawing on credit, with a 1.25% origination fee. What are the debits and credits for this series of typical transactions for NC

How many hp laser printers should have in stock : How many HP laser printers should he have in stock when he reorders from the manufacturer? What should be the reorder point set at?

How would set up a statistical test : 10 employees while recording unsafe acts. How would you set up a statistical test to determine if there were any changes in the unsafe acts observed?

Prepare a contribution format income statement : Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet

Determine probability that at least one envelope a red one : If three envelopes are selected at? random, without? replacement, determine the probability that at least one envelope a red one

User Account

All Pages