Use the Fact Situation in Q1 to Answer the Related

question 41

Multiple Choice

Use the fact situation in Q1 to answer the related question that follows. Based on date and time of registration,if the property is worth $200 000.00 and George defaults on the Royal Bank mortgage and the bank immediately brings foreclosure proceedings,

• A)it can only gain possession of the property.
• B)it will have title to George's house subject to the TD Canada Trust mortgage.
• C)it will obtain enough money from the sale to pay off the TD Canada Trust mortgage.
• D)it will cut out the interest of TD Canada Trust.
• E)none of the above

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Definitions:

Cost Model

A method of accounting where assets are carried at their cost minus any accumulated depreciation and impairment losses.

Realized Gains

Profits earned from the sale of an asset, which exceed the asset's purchase price, recognized in the company's financial statements.

Fair Value

Fair value is the estimated price at which an asset or liability could be traded in a fair transaction between willing parties, other than in a forced or liquidation sale.