2nd Mortgage Bookkeeping Question
I got a 2nd mtg for $85,000.00 @ 8.25% initial annual int rate. Compounding monthly starting Feb 1,2008.
The APR is 11.496% advanced to us on Jan 18,2008. Term 24 months and amortization period 300 months.
The first payment is due March 1,2008. Maturity is Feb 1,2010 and payment amount is $671.00 per month.
A payment of $172.89 was made in Feb 2008, which was the first payment for 8 days. And then 671.00 March 1,2008, which was made up of interest 155.83 and principal 17.06 and then 584.26 interest and 86.74 which had the balance at $84,896.20.
We then got in a mess and from July 1,2008 the payments were all NSF.
They added the amount of 671.00 plus 25.00 NSF fee on to mortgage amount which was $84,632.38 after June payment.
At the end of 2008 the amount of mortgage was now $88,336.63, and in Jan 2009 we made a payment of 671.00 which was interest 607.31 and principal 63.69 with the balance now at $88,272.94.
Then all our payments went behind again and as of Aug 1,2009 the balance was $92,104.96.
I just don't understand how the principal goes up so much. Are they allowed to add the payment missed and NSF fee on to the mortgage?
It doesn't seem right or fair. I don't know how to figure it out. Thank you,
Bookeeping a Mortgage Liability
I know that a mortgage due is a short term liability for what principle is due within the current fiscal year; and a long term liability for the remainder.
Lets say that My company has a $400,000 mortgage. It pays $4,000/mth x 12 $48,000. $20,000 is payment of principal and $28,000 is interest.
How do I actually record this on my balance sheet? I know the concept I need to be shown exactly how it is done. I use quick books.