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View Full Version : How to record Mortgage payment in General Ledger?


whatsbruin
Sep 24, 2010, 06:59 PM
On December 1st, you make a mortgage payment of $1600. The interest on the mortgage is $200. The principal is $1400. How would you record this in the general ledger and balance sheet?

pready
Sep 25, 2010, 10:48 AM
Debit Insurance Expense for the amount of insurance
Debit Mortgage Payable for the amount of principal
Credit Cash for the total amount.

Insurance Expense balance will be an increase
Mortgage Payable balance will decrease
Cash balance will decrease