Recording the sale of a property - clarification (Rustler)

tina-hacker55 · ‎December 10, 2018

To Rustler- I referenced your answer to a question from another person regarding entering a property sale into QB and did the following.... I created a "gain/loss on asset sale account" and calculated and posted the accumulated depreciation for this year. I then did the following journal entry: debit accumulated depreciation $, credit gain/loss (same amount both entries)

(I did this for both the building and the improvement accumulated depreciation accounts.)

I have 2 questions...

1.) I need clarification for the dollar amounts for the following journal entry:

debit gain/loss and credit fixed asset $. What $ amount gets applied to the debit gain/loss? (Is it the same $'s associated with the fixed asset?)

And as I understand your instructions I need to do a journal entry for each fixed asset account related to the sale?

2.) You stated "deposit the funds received and use the gain/loss account as the source (from) account for the deposit." There is a "Received From" field and a "From Account" field in the Make Deposits . What do I put in the field for "Received From" for the deposit? Should I enter the Title company, or purchaser of the property who deposited the funds to the bank account?

Rustler · ‎December 10, 2018

tina

Yes you use the total in the fixed asset account for the value to clear that account. ie if a building fixed asset account has the value of 150,000 the journal entry would be

debit gain loss 150K
credit fixed asset building 150K

Yes each fixed asset account that was sold, and each associated accumulated depreciation account too

In the deposit, leave received from blank, and just select the source (from) account. Using received from would create a credit entry which you do not want to happen

View solution in original post

Rustler · ‎December 10, 2018

tina

Yes you use the total in the fixed asset account for the value to clear that account. ie if a building fixed asset account has the value of 150,000 the journal entry would be

debit gain loss 150K
credit fixed asset building 150K

Yes each fixed asset account that was sold, and each associated accumulated depreciation account too

In the deposit, leave received from blank, and just select the source (from) account. Using received from would create a credit entry which you do not want to happen

tina-hacker55 · ‎December 10, 2018

I've got it now- thank you very much. (This forum is so awesome!)

Rustler · ‎December 10, 2018

You're Welcome

Flopadago · ‎February 11, 2019

I opened a bank account and deposited $50,000: Debit Cash, Credit Equity

I purchased a house for $47,500+$2,500 of capitalized expenses so $50,000 all cash: Credit Cash $50k, Debit Fixed Asset 68 Elm St. $50k

I sell house for $60,000: I Debit Cash $60,000, Debit Fixed Asset 68 Elm St. $50,000, Debit Income Account Sale of Real Estate.

Did I do it right?

This all happened in 30 days so I am ignoring depreciation on purpose.

I have a few other expenses but I am only recording capitalized asset above and will charge off other costs as "expenses" on the tax return.

Flopadago · ‎February 11, 2019

I opened a bank account and deposited $50,000: Debit Cash, Credit Equity

I bought a house for $47,500 and capitalized $2,500 of Closing Costs: Credit Cash & Debit Fixed Asset 68 Elm St.

I sold the house for $60,000: I Debit Cash for $60,000 & Debit Income Sale of Real Estate $10,000 & Credit Fixed Asset $50,000.

I have ignored depreciation on purpose, the transaction only took 30 days.

I will just expense some repair/clean up etc. and that will automatically show up on the income statement.

Have I done it right?

Flopadago · ‎February 12, 2019

I see I forgot to say the amount the income account was Debited ($10K to balance to $60K)

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Recording the sale of a property - clarification (Rustler)