Coupons for Clients
I am trying to reconcile books for clients all the way back to 2014. I came across a unique situation with them.
The owner bought the business equipment, rolling stock, customer list, software, and other business items but not for cash. He bought all of it in exchange to honor coupons to former clients (270k) that had been screwed over by prior businesses bankruptcy. How do i show equity into the business? how do i track these coupons?
Re: Coupons for Clients
The coupon is a liability, create a liability account named for the coupons due [name]
The amount in the coupon liability account is what pays for the purchase, so as an example he buys a lathe as part of this deal, use an expense transaction, list the fixed asset account for the lathe and the amount, then on the next line use the coupon due liability account and enter the same amount as a negative number, save the zero dollar transaction. The value of the fixed asset goes up, the liability account is increased by the same amount