On the balance sheet for a client it shows a liability figure of £177,000 for a mortgage - the mortgage was originally taken out on the Directors 2nd home years ago and the money transferred into the business. The Director has now sold the property and consequently paid off the mortgage; however the final payment and actual remaining balance of the mortgage was £203,000.
For the journal entry, I remove the mortgage liability of £177k and increase the Directors loan of £203k but I am unsure how to account for the remaining £26k?!
Can anyone help with this? Answer I am sure is simple but I have been staring at it for so long I am going round in circles!
And surely this should have been picked up by previous accountants with the mortgage statements at Year End?!