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Susan607
Level 3

Closing statement transaction recording for startup business

I am completely befuddled as how to record this startup GL transaction.  Any help would be most appreciated. Thank you so much.

 

I have an SBA loan for buying a business which required a 15% downpayment.  The downpayment came from my personal funds.  I'd like to recoup it from the business.  How is this recorded? Is it a N/P to me from Co. & debit to SBA loan of $150,000 bringing balance of SBA loan to $135,000?

 

My big issue is recording the closing transactions:

The seller issued a N/P to help with closing costs and for Goodwill for the purchase.  The purchase price was $175,000.  The Goodwill according to purchase agreement was $25,000, Fixed Assets  were $150,000.  No money came from me for the closing.  My understanding is all the closing costs came out of the N/P from the seller.

How do I record this?  This is all that's on the closing statement.

                                              Db

Fixed Assets                  $150,000

Goodwill                           $25,000

Inventory & adj                   $5,222

        Due seller at closing                       $180,222

Closing costs were            $10,235

(lawyers, taxes) Expenses

Check to me at closing     $10,070 

Asset                              

                                                         Cr

SBA Net loan proceeds         $135,000

N/P from Seller                          $50,000

                                                    $185,000

1 Comment 1
john-pero
Community Champion

Closing statement transaction recording for startup business

No money came from you for closing? So SBA relied on the seller financing for the down payment? Seems not like them but go with it.

 

If the SBA loan is 150k then it is 150k and is not reduced by anything.

 

There appear to be some missing numbers. Adding all from left side of HUD-1 statement we get $190457 owed plus $10070 cash to you = gross $200527. N/P seller, $50527, SBA loan $150,000. If the loan amounts are exactlyb50 and 150 then 527 unaccounted for.

 

You put zero in, there is nothing owed to you for personal fund contribution to be repaid. As it is you got 10k back bonus to spend.

 

Goodwill, as an intangible Fixed Asset is never depreciated, never expensed, until you in turn sell.

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