Spring, TX · Member since 2017 · 2 posts · 0 votes
Hi there...I'm a newbie and I need HELP!! Can someone please tell me what the J/E would be for the attached Settlement Statement? This property is in a LLC, but we paid for it personally, so do I first need to include an entry that debits Cash for $74,092.10 and credits Contribution to Owner's Equity?? Thanks SO much!!!! :-)
Flipper · Crown Point, IN · Member since 2017 · 15 posts · 10 votes
9y
First, I would suggest that you contact your CPA/tax professional and find out what their preference is on how much detail that you need on your books for these transactions. My CPA really prefers it pretty simple: contract price, adjustments (fees), earnest money, cash downpayment, and loan.
Then you need to make sure your line items equal. So your contract price, and fees should equal the EM, downpayment and loan.
I also would have normally placed our EM in an asset holding account when we sent it with the contract.
In QB I would normally create a fixed asset account for the property. Then 2 sub-accounts for the price and adjustments each. (Just helps sanity to keep them separate) You also need a liability account for the loan.
Debit price from asset account
Debit fees from asset account
Credit earnest money from asset account
Credit downpayment from owners contribution
Credit loan amount to liability account
The totals of both sides should match.
Flipper · Crown Point, IN · Member since 2017 · 15 posts · 10 votes
9y
First, I would suggest that you contact your CPA/tax professional and find out what their preference is on how much detail that you need on your books for these transactions. My CPA really prefers it pretty simple: contract price, adjustments (fees), earnest money, cash downpayment, and loan.
Then you need to make sure your line items equal. So your contract price, and fees should equal the EM, downpayment and loan.
I also would have normally placed our EM in an asset holding account when we sent it with the contract.
In QB I would normally create a fixed asset account for the property. Then 2 sub-accounts for the price and adjustments each. (Just helps sanity to keep them separate) You also need a liability account for the loan.
Debit price from asset account
Debit fees from asset account
Credit earnest money from asset account
Credit downpayment from owners contribution
Credit loan amount to liability account
The totals of both sides should match.