In those cases where a part of the purchase price remains unpaid and is secured by a mortgage, the situation becomes rather more complicated, especially as to the methods of entering the profits. No one rule can be made to apply to all such cases, and each transaction of the kind should be carefully examined by the accountant.

Of such cases the simplest is where the purchaser makes a substantial cash payment and gives a mortgage for the balance. The ratio between the cash payment and the mortgage then determines the proper course to be followed. If, for example, half the purchase price is paid in cash, the mortgage is secured by property worth twice the amount of the mortgage, and such mortgages are usually regarded as first-class securities. It would therefore be safe to place the mortgage among the assets at its face value. In other words, although the entire consideration has not been paid, we can regard the sale as completed and the profit as fully earned. The mortgage receivable can be treated as a bona fide asset for its face value.