Sale of land on Contract for Deed

[sglass]

On December 28th we entered in a contract for deed to sale a parcel of land that was originally intended for church use. The terms were a deposit of xx amount of dollars and monthy payments of xx amount of dollars for 48 months and at the end of the 48th month a balloon payment of the remaining balance. There is no interest charged on the monthly payments. We currently have an outstanding mortgage on the parcel of land. I understand that I debit cash for the amount of money we receive but my question is do I credit the land until it becomes a gain? and if not what account should I credit!
Also when it does become a gain and that particular land account is to zero where should I create the gain account?

[Matt]

You need to set up an accounts receivable account for the amount of the sale that was financed. Let's say the contract amount was $10,000, the deposit amount was $1,000, and the value of the land on the books was $7,500. Here's the accounting entries you would need to make:

1). Sale of Land

Debit Cash $1,000
Debit Accounts Receivable $9,000
Credit Land $7,500
Credit Gain on Sale $2,500

2). Receipt of monthly payments

Debit Cash
Credit Accounts Receivable

[sglass]

On December 28th we entered in a contract for deed to sale a parcel of land that was originally intended for church use. The terms were a deposit of xx amount of dollars and monthy payments of xx amount of dollars for 48 months and at the end of the 48th month a balloon payment of the remaining balance. There is no interest charged on the monthly payments. We currently have an outstanding mortgage on the parcel of land. I understand that I debit cash for the amount of money we receive but my question is do I credit the land until it becomes a gain? and if not what account should I credit!
Also when it does become a gain and that particular land account is to zero where should I create the gain account?

Thank you for all your help I knew someone would help me.

Sheila