Final answer:
Mortgagee title insurance is typically a cost paid by the borrower, and thus the correct entry is a single-entry debit to the buyer. No other parties, such as the seller or broker, are involved in this specific cost.
Step-by-step explanation:
When a buyer is obtaining a new loan and the mortgagee title insurance appears on the lender's statement, the appropriate accounting entry is a single-entry debit to the buyer. This is because mortgagee title insurance protects the lender against loss due to title defects, and its cost is typically paid by the borrower as part of the closing costs on a loan.
Therefore, option 2, Single-entry debit to the buyer, best represents the correct entry. Since this expense is for the lender's protection, it is standard practice for the buyer to pay for this insurance policy; it does not involve the seller or the broker in the transaction.
The concept of Escrow is also relevant in understanding mortgage transactions, as it is a service that can manage the payment of the homeowner's insurance and property taxes. Moreover, the reserved requirements mentioned for Singleton Bank illustrate another aspect of the banking system, where a portion of deposits is required by regulation to be kept in reserves, whilst the remaining funds can be used for lending activities.