What is the proper way to pay off a mortgage when a home is sold? The Mortgages are short-term liabilities as I work with a builder.

melireton:

Odds are a sale will take the form of a few different transactions:

Sale -

Debit Cash/bank account

Credit Accounts Receiveable (invoice)

Mortgage payment

Credit Cash/bank account

Debit Mortgage amount

Debit any additional mortgage related expenses (early payment penalty, fees, interest, legal fees, etc.)

Shouldn't be too complicated...