335 Mortgages Payable – Real Estate
Liabilities
Long Term
Synopsis
Account 335 is established to record the amount due beyond the next 12 months for loans secured by real estate used by the dealership in the automobile business.
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Debits |
Credits |
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Example 1
Record the proceeds from a new mortgage on the dealership property. The old mortgage of $3,005,490 was paid off with part of the proceeds. The dealership also incurred $15,278 of costs associated with obtaining this mortgage.
Journal: Cash Receipts
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Entry: |
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Debit |
Credit |
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Account 201 |
Cash on Hand |
$1,479,232 |
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Account 335 |
Mortgages Payable – Real Estate |
$3,005,490 |
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Account 296 |
Other Investments & Miscellaneous Assets |
$15,278 |
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Account 335 |
Mortgages Payable – Real Estate |
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$4,500,000 |
Example 2
Record the monthly mortgage payment of $38,051 that is due for the month. The amount of $15,551 is applied to the principal and the interest is $22,500
Journal: Cash Disbursements
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Entry: |
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Debit |
Credit |
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Account 335 |
Mortgages Payable – Real Estate |
$15,551 |
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Account 320 |
Interest Payable |
$22,500 |
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Account 202 |
Cash in Bank |
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$38,051 |
Example 3
Record the amount of $455,683 for the real estate mortgage that is due within the next twelve months.
Journal: General Journal
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Entry: |
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Debit |
Credit |
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Account 335 |
Mortgages Payable – Real Estate |
$455,683 |
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Account 314 |
Notes Payable – Other |
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$455,683 |
Comments
A credit balance: represents amounts NOT DUE within 12 months from the current operating report date and secured by real estate.
Note:
The current amount of Real Estate Mortgages is recorded in Account 314, Notes Payable – Other.