I've thoroughly confused myself by doing some google searches and ignoring my gut, so I want to hear from you!
I have a client who sold a struggling business, and I'm trying to tie up loose ends here with a few journals.
The purchase agreement had an allocation for the cash in drawers, lease liabilities, inventory, franchise fees, accounts payable, and intangibles. No cash entered the business accounts, but liabilities were assumed by purchaser except for loans from partners.
QB won't allow me to make a single JE due to multiple a/p accounts.
Beginning Balance Sheet is A 365812 = L (644537+ E -278725)
Proceeds were $550k
So, they didn't even get enough to pay off liabilities.
What kind of entries am I supposed to do for this? I have overthought this to the point that I don't know up from down.
The other company by assuming lease liability, inventory, etc etc did in fact pay for those, at least as far as the old company books are concerned.
sell assets for the agreed upon price, deposit the to the temp cash type bank account you create. Inventory will have to be sold per item on a sales receipt with qty, you can not use a journal entry for inventory items
pay liabilities from that temp bank account too transfer cash on hand to the temp bank
roceeds were 550K - but you said no cash entered the business?