Banking
Home Mortgage — Monthly Principal + Interest Collection
Collecting the monthly mortgage installment from the borrower.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Customer Account (Debit) | Liability (-) | 1,100.00 | - |
| Mortgage Loans (Principal Reduction) | Asset (-) | - | 350.00 |
| Accrued Interest Receivable (Cleared) | Asset (-) | - | 750.00 |
💡 Accountant's Note
Each mortgage payment clears the accrued interest first (already on the income statement) and reduces the principal. Early in the mortgage term, most of the payment is interest; later, most is principal — classic amortization behavior.
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