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Real Estate Borrower Closing Statement

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    Real Estate Borrower Closing Statement

    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.

    #2
    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.
    Roland Slugg
    "I do what I can."

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