A business making a monthly mortgage payment that included $1,200 principal and $300 interest should be recorded as:
A) $\begin{array} { | c | r | r | }
\hline \text { Mortgage payable } & 1,200 & \
\hline \text { Interest payable } & 300 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$
B) $\begin{array} { | c | r | r | }
\hline \text { Mortgage payable } & 1,500 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$
C) $\begin{array} { | c | r | r | }
\hline \text { Cash } & 1,500 & \
\hline \text { Mortgage payable } & & 1,500 \
\hline
\end{array}$
D) $\begin{array} { | c | r | r | }
\hline \text { Mortgage payable } & 1,200 & \
\hline \text { Interest expense } & 300 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$

Question

A business making a monthly mortgage payment that included $1,200 principal and $300 interest should be recorded as:
A) $\begin{array} { | c | r | r | } 
\hline \text { Mortgage payable } & 1,200 & \
\hline \text { Interest payable } & 300 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$
B) $\begin{array} { | c | r | r | } 
\hline \text { Mortgage payable } & 1,500 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$
C) $\begin{array} { | c | r | r | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Mortgage payable } & & 1,500 \
\hline
\end{array}$
D) $\begin{array} { | c | r | r | } 
\hline \text { Mortgage payable } & 1,200 & \
\hline \text { Interest expense } & 300 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$

Quizplus · Accepted Answer

Option D correctly separates the principal amount ($1,200) and the interest expense ($300), and shows a decrease in cash ($1,500) to reflect the total payment made.

A Business Making a Monthly Mortgage Payment That Included $1,200