Sam and His Wife Ann Purchased a Home in Lubbock

Multiple Choice

Sam and his wife Ann purchased a home in Lubbock, Texas, in 1980 for $100,000. Their original home mortgage payment was $90,000. The house has a current market value of $175,000 and a replacement value of $200,000. They still owe $55,000 of their home mortgage payment. In their current balance sheet, their home will be reflected as:

A) a $200,000 asset for the replacement value and a $55,000 liability for the outstanding mortgage.
B) a $200,000 asset for the replacement value and a $90,000 liability for the original mortgage.
C) a $175,000 asset for the market value and a $55,000 liability for the outstanding mortgage.
D) a $175,000 asset for the market value and a $90,000 liability for the original mortgage.
E) a $100,000 asset for the purchase price and a $55,000 liability for the outstanding mortgage.