On January 1, 2018, Benbrook Company purchased equipment and signed a six-year mortgage note for $160,000 at 15%. The note will be paid in equal annual installments of $42,278, beginning January 1, 2019. Calculate the balance of Mortgage Payable after the payment of the first installment. (Round your answer to the nearest whole number.)

Balance of the mortgage payable after first installment =  $142,000

Explanation:

Interest Expense of First Installment = Principal x Interest Rate

               = $160,000 X 15% = $24,000

Principle amount of the installment=Total annual  installment−Interest of the first  installment

                =$42,278 −$24,000  =$18,278

Balance of the mortgage payable=   Opening mortgage payable balance

−Principle amount of the first installment

​=$160,000 - $18,278

=$141,722  rounded up to $142,000

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