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Unformatted text preview: principal on the furniture loan as well as the interest due on the loans. On December 31, 2008, Grace paid $10,000 principal on the house loan and $1,000 principal on the furniture loan. On January 15, 2009, she paid interest on the house and furniture loans for the year ended December 31, 2008. In summary, then, the remaining balances at the noted dates are as follows: January 1, 2008 January 1, 2009 House loan $90,000 $80,000 Furniture loan 9,000 8,000 Stock loan 20,000 20,000 Assume the prescribed rates of interest for 2008 were as follows: 1st quarter - 4%, 2nd quarter - 4%, 3rd quarter - 5% and 4th quarter - 5%. The prescribed rate on June 1, 2007 was 5%. Required : Calculate the tax consequences in 2008 to Grace Ravens of the loans described above. Ignore the effects of a leap year....
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This note was uploaded on 11/19/2010 for the course ACC 742 taught by Professor Sydor during the Spring '10 term at Ryerson.
- Spring '10