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LisaX
Level 2

Recording fire damages to property

Here's my scenario that I need help with. Thank you in advance.

 

We have land valued at $600,000. There was a structure but because it's so broken down, it accounts for $0. Trespassers came and set the structure on fire and the insurance paid out $600,000. Since land itself does not get depreciated, we don't record that. However, there is a balance on the loan of $553,158 with interest accrued up to payment was $1244. The bank refunded us the difference of $45,597.

 

Here's how I have my journal entry written up:

 

Loan Payable - debit $553,158

Interest expense - debit $1,244

Cash - debit $45,597

Fire Damage - Credit $600,000

 

What do I do from this point and what type of account is the Fire Damage (I'm assuming OTHER INCOME). Thanks!

 

Solved
Best answer March 18, 2022

Best Answers
Rustler
Level 15

Recording fire damages to property

Yes it is other income

View solution in original post

1 Comment 1
Rustler
Level 15

Recording fire damages to property

Yes it is other income

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