Co-op financial statement shows 2 mortgages, what does it mean?
Question Details: The Mortgage Payable note states: "The corporation refinanced their mortgage on May 1 2005 with in the amount of 900,000 with an interest rage of 5.35 per annum. The mortgage matures on May 1, 20015. Also, the building has a line of credit with at a rate of 7.37%. At December 31, 2008 the balance was $867,861" Under liability I see "First mortgage payable to $867,861" and some "Accounts payable $ 27,441" and that's it -- no specific mention of or the other loan. I'd appreciate any thoughts on what this might mean.
Real Estate Law Answers
That sounds to me as if the balance on the line of credit, if any, along with any other accounts payable, adds up to $27,441. The line of credit clearly can't be part of the first mortgage entry, so if there's only that one other item under "liabilities," it has to be in there.
This isn't necessarily improper. I'm not an expert on accounting practices, but accountants, like many other professionals in financial and related fields, have to answer for what they do. I'd assume that most of that $27,441, or perhaps all of it, is in fact the credit line, since it was the only other liability you mentioned as being included in the narrative.
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