This is a sub-ledger intended to show all the particulars of every mortgage held by the concern. (See Form 8.) It is of minor consequence whether it be a bound book or a loose-leaf ledger, as the mortgages may be entered in the order of their serial numbers. The form of ruling adopted in either case should provide for the exhibition of the following facts:

Serial number of mortgage; name of mortgagor; description of property and serial property number; amount of mortgage; date made; date due; value of security; rate of interest; dates when interest falls due; amount of insurance to be carried; details of notes - number, due dates, etc.; particulars of the recordation of the mortgage; profit.

Rulings should also be provided for a "Principal" account and for "Interest and Charges."

The mortgages receivable book shown in Form 8 meets the above requirements, and in connection with the property ledger gives all necessary information regarding mortgages receivable.

As soon as a mortgage receivable - that is, a mortgage given to or acquired by the concern - is executed and delivered, it should be entered in this book under the first vacant serial number. For instance, if the first of such mortgages were made by Alfred Jones, it would be known in the accounts as "Mortgage Receivable No. 1 - Jones."

Inasmuch as precedence among several liens upon the same piece of property may depend very largely, if not entirely, upon the dates of their respective recordation, no time should be lost in sending each mortgage received to the proper recording officer; and when this is done a pencil memorandum of the fact should be made on the mortgages receivable ledger. When the mortgage is returned, the full particulars of its recordation should be entered in this ledger and the mortgage itself should be filed in its proper place.

Form 8. Mortgages Receivable Ledger

Form 8. Mortgages Receivable Ledger.

In the mortgages receivable ledger, each Principal account is debited with the original amount of the loan and credited with each payment on account of principal as it is made. The total balances of these columns of the sub-ledger must therefore agree with the balance of the Mortgages Receivable account in the general ledger.

It is frequently convenient in determining action regarding mortgages (for instance, when a mortgage is in arrears), to know the amount of profit in the original transaction. A place for this information is therefore provided in the mortgages receivable ledger under the heading "Reserve," this saving reference to the journal or other book in which the amount is recorded in the ordinary routine.

The Interest and Charges account of each mortgage is debited in the mortgages receivable ledger with interest as it falls due, and also with all expenditures for taxes, insurance, paving assessments, etc., paid by the concern but which are to be repaid by the mortgagor. The account is credited with money received from the mortgagor, or from other sources, in payment of these charges.

The total balance of the Interest and Charges account of the mortgages receivable ledger must equal the sum of the balances in the general ledger under the accounts Overdue Mortgage Interest Receivable, Mortgage Taxes, Mortgage Insurance, Mortgage Assessments, etc.

If it is intended that the lending of money on mortgage shall form a distinct branch of the business, proper forms of application and forms for reports of valuers and inspectors should be provided. Properly speaking, these are not accounting forms and therefore are not discussed further in this volume.