Question

The buyer is assuming the seller's loan with a balance of $250,000.00 at 9%. Closing takes place on April 4th. The interest due will appear on the worksheet as __________.

1. debit $187.50 to seller and credit buyer $187.50.
2. debit $184.93 to buyer and credit broker $184.93

Answer 1

Interest due
250,000×0.09×(3÷365)
=184.93

So the answer
2. debit $184.93 to buyer and credit broker $184.93

Answer 2

1. debit $187.50 to seller and credit buyer $187.50.