Kent Co., a division of National Realty, Inc., maintains escrow accounts and pays real estate taxes for National’s mortgage customers. Escrow funds are kept in interest-bearing accounts. Interest, less a 10% service fee, is credited to the mortgagee’s account and used to reduce future escrow payments. Additional information follows:
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Escrow accounts liability, 1/1/06 |
$ 700,000 |
|
Escrow payments received during 2006 |
1,580,000 |
|
Real estate taxes paid during 2006 |
1,720,000 |
|
Interest on escrow funds during 2006 |
50,000 |
What amount should Kent report as escrow accounts liability in its December 31, 2006 balance sheet?
- $510,000
- $515,000
- $605,000
- $610,000