Land Purchase Down Payment

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HolderS
Posts: 6
Joined: Tue May 24, 2022 11:31 am

Land Purchase Down Payment

Post by HolderS »

The church made a down payment on land in April and paid cash for the remaining balance on the property in May. I am unsure how to enter this correctly.

Thanks.
Sheilah
PC Online

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: Land Purchase Down Payment

Post by NeilZ »

HolderS wrote:
Tue May 24, 2022 11:39 am
The church made a down payment on land in April and paid cash for the remaining balance on the property in May. I am unsure how to enter this correctly.

Thanks.
Sheilah
PC Online
Are you tracking land assets? If not, the purchase is the same as any other purchase. Credit the bank account, and debit an expense.
Neil Zampella

Using PC+ since 1999.

HolderS
Posts: 6
Joined: Tue May 24, 2022 11:31 am

Re: Land Purchase Down Payment

Post by HolderS »

We have not been tracking land assets, however, they would like to start with this purchase and I also need to add the existing property in as well. Sorry, should have been more detailed in my first question.

Sheilah

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: Land Purchase Down Payment

Post by NeilZ »

HolderS wrote:
Wed May 25, 2022 11:53 am
We have not been tracking land assets, however, they would like to start with this purchase and I also need to add the existing property in as well. Sorry, should have been more detailed in my first question.

Sheilah
OK ... are you going to carry the assets in the normal Operating Fund, that is, the one where you normally track income and expense, or in a separate Land & Bulding Asset Accounting Fund. I recommend a separate Fund as that keeps the operating fund from looking like there's more 'liquid assets' available than there really is.

In either case you would enter a transaction in Fund Accounting like this assuming the total of all land & building assets is $100,000:

DB 01-1810-000 building asset $100,000
CR 01-3110-000 unrestricted net assets $100,000

Obviously, you'll have to create the asset account. The Unrestricted Net Assets account is the default created in Powerchurch. Also, if you're going to use a separate Accounting Fund, you would include the 3110-000 account there, and create the asset account. Which means that the transaction listed above would have the leading '01' number changed to the number used for the new Accounting Fund.

NOTE ... this still means that you would pay out the funds as a normal payment from Accounts Payable using the bank and expense accounts.
Neil Zampella

Using PC+ since 1999.

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