I have two real estate properties:
I need to add them to the assets and liabilities & expenses.
Balance Sheet
The assets are the purchase price of the homes, correct?
I put the two properties (homes) under fixed assets.
home 1 $225,500
home 2 $250,000
The liability is the $400k Line of credit used to purchase these homes, correct?
Income statement (p&l)
Now, I paid cash for the closing costs, down payment, and earnest money deposits $85,000 (just using round numbers)
This is an expense, right?
home 1 $38,426.91
home 2 $46,417.41
Now, do I need to also include the remaining balance for the total cost of each home in the above expense?
home 1 $208,325.00
home 2 $191,675.00
These two amounts above, are also the same amounts for the Line of credit $400k So if I enter this as an expense will this overstate the liability on the balance sheet?
I have had to make journal entries for each home crediting the opening balance equity and debiting the homes expense account, is this correct?
When making a journal entry for new real estate do I use opening balance equity?
Thank you.
