Thayer Company purchased a building on January 2 by signing a long-term $2,520,000 mortgage with monthly payments of $23,100. The mortgage carries an interest rate of 10 percent. The entry to record the mortgage will include a
A) debit to the Cash account for $2,520,000.
B) credit to the Cash account for $2,520,000.
C) debit to the Mortgage Payable account for $2,520,000.
D) credit to the Mortgage Payable account for $2,520,000.

Question

Quizplus · Accepted Answer

The entry to record the mortgage will include a credit to the Mortgage Payable account for $2,520,000, as this represents the liability incurred by the company.

Thayer Company Purchased a Building on January 2 by Signing