Real Estate
Mortgage Refinancing — Gain on Early Settlement
Settling an existing mortgage early at a discount and recording the gain.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Mortgage Loan Payable | Liability (-) | 500,000.00 | - |
| Cash / Bank | Asset (-) | - | 480,000.00 |
| Gain on Debt Extinguishment | Revenue (+) | - | 20,000.00 |
💡 Accountant's Note
If a bank agrees to settle the loan at a discount, the difference between the carrying value and the amount paid is a gain recognized immediately on the income statement.
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