On 1 October 2020 ABC World purchased a building for $200 000, paying $75 000 as a deposit and giving the seller a 12% mortgage for the balance. The monthly repayment was $1 500. What is the entry to record the payment on 1 November 2020?

Select one:

a. Dr mortgage payable $1 500; Cr bank $1 500

b. Dr interest expense $1 250; Dr mortgage payable $250; Cr bank $1 500

c. Dr interest expense $1 500; Cr bank $1 500

d. Dr interest expense $1 250; Dr bank $250; Cr mortgage payable $1 500

Answer rating: 100% (QA)

Calculation of interest 200000... View the full answer