cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Experienced Member
Solved

Long Term Liability

I have set up a long term liability account with a starting balance of $175,000. for purchase of ground. However, when we had our closing with the bank we paid $75,000. down payment. Where and how do I post the entry for the $75k down? The total ground price was $250,000. So I set the long term liability up with a balance owed of $175k. 

Do I need to link this long term account with another asset account?

Best answer 02-27-2019 03:08 PM

Accepted Solutions
Community Backer **

Re: Long Term Liability

If the land cost $250K than you have an asset equal to $250K.  The initial liability should also be $250K.  When the check for $75K down was paid, you reduce the liability leaving the liability balance at $175K.

1 Comment
Community Backer **

Re: Long Term Liability

If the land cost $250K than you have an asset equal to $250K.  The initial liability should also be $250K.  When the check for $75K down was paid, you reduce the liability leaving the liability balance at $175K.