# What are current liabilites related to mortgages?

You borrow 250,000 on a 30 year 5% home mortgage on september 1, 2010. Payments are made monthly beginning october 1, 2010. Financial statements are prepared Dec 31, 2010. What are the amounts and account titles of the current liabilities related to the mortgage.

 Just Looking Posts: 1,610, Reputation: 2419 Ultra Member #2 Nov 30, 2010, 07:54 PM
You can go online and google loan or mortgage calculator. With the info you have, it will tell you the monthly payments. From there, you can compute the interest for Oct, Nov, and Dec 1 (loan balance at 5% for 1 month), with the difference being the principal payment. The current liabilities at 12/31 are the principal payments that will be made in the one year period. It's easy to make a spreadsheet to compute principal and interest. If you'll give this a try and post your answers, we'll check them for you. We won't just do the homework for you. Please see this announcement.

 dontkid508 Posts: 2, Reputation: 10 Junior Member #3 Nov 30, 2010, 08:05 PM
Ok so the 1342.05 monthly payment would be split into which account titles? Would it be mortgage payment and interest expense, I'm asking in reference to the question.
 Just Looking Posts: 1,610, Reputation: 2419 Ultra Member #4 Nov 30, 2010, 09:30 PM
That's correct. Did you understand how to compute the interest portion? I would do a spreadsheet with calculations for the interest, the balance to principal, and the new mortgage balance - do it for the three months of the current year and the twelve months of next year. It will give you the answers you need.