I sold my S Corporation assets on an installment sale. The assets sold were Cash Asset $20,000, A/R $5,000, Equipment $5,000, Customer List $100,000, Covenant Not to Compete $45,000, Goodwill $45,000. I set up 6 asset accounts for the 6 assets sold to track the balances in each asset's account, and 6 income accounts to track the income allocated to each of the income accounts. I created an interest account to track the interest on the promissory note. I receive 15% of the buyer's gross receipts each month. Before receiving any payments on the promissory note I wrote a check for $20,000 to the buyer and recorded it to the Cash asset portion of the sale. After receiving a check from the buyer for 15% of the buyer's February 2022 gross receipts I deposited the check and then I recorded the check details in QB Online as follows in order to track both the income and the reduction in the amount of the A/R asset balance:
DR CR
Cash $3,330.39
Interest $ 579.95
Cash Asset $2,750.44
Clearing Account $2,750.44
A/R Income $2,750.44
This was the only way I could see in QB Online to do it to be able to record both the income and the reduction in the A/R asset account in one transaction. The problem: I'm now accumulating a balance in the Clearing Account. How can this be avoided?
