Real Estate Borrower Closing Statement

[Visitor 101]

I read a real estate borrower closing statement and journal entry.

Debit
Cash $200,000
Interest Expense $100,000
Closing and Title Fees $320,000
Other Expenses $ 60,000
Notes Payable $5,000,000

Credit
Notes Payable $5.100,000
Deposit $580,000

I don't understand why they prepare this transaction. refinance? buy the property?

Your thought is appreciated.

[Roland Slugg]

Refi

It's a refi escrow, taking out a new loan for $5,100,000, and paying off an existing loan for $5,000,000. If it was a purchase escrow, the main debit would be the purchase price of the property itself, and there would not be a debit for a loan being paid off.