Maggy has a $6,000 outstanding HBP balance against which she must make minimum payments of $1,000 for each of the years 2018 to 2023 inclusive, after which the plan's balance will be zero. Maggy doubles her annual payment in 2018 and pays $2,000 instead of the required minimum payment of $1,000. Identify the statement that is correct. O The extra $1,000 payment will reduce the outstanding balance to $4,000 and Maggy's minimum repayment amount will be adjusted to $800 for each of the years 2019 to 2023 inclusive. The extra payment in 2018 will be disallowed as Maggy must follow the original repayment schedule. O The extra $1,000 payment will shorten Maggy's minimum repayment schedule by 1 year as she will be required to continue the minimum $1,000 payments but with the last payment finishing in 2022. O The extra payment in 2018 will allow Maggy to skip the 2019 and 2020 payments without triggering any tax consequences

Maggy has a $6,000 outstanding HBP balance against which she must make minimum payments of $1,000 for each of the years 2018 to 2023 inclusive, after which the plan's balance will be zero. Maggy doubles her annual payment in 2018 and pays $2,000 instead of the required minimum payment of $1,000. Identify the statement that is correct. O The extra $1,000 payment will reduce the outstanding balance to $4,000 and Maggy's minimum repayment amount will be adjusted to $800 for each of the years 2019 to 2023 inclusive. The extra payment in 2018 will be disallowed as Maggy must follow the original repayment schedule. O The extra $1,000 payment will shorten Maggy's minimum repayment schedule by 1 year as she will be required to continue the minimum $1,000 payments but with the last payment finishing in 2022. O The extra payment in 2018 will allow Maggy to skip the 2019 and 2020 payments without triggering any tax consequences

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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