How do I record a purchase of a business entity? It had a small amount of assets (office equipment), client base, and had no liabilities.
Using Quickbooks Pro 2008. Cash basis. How do I record the 12 monthly purchase payments?
You would write the initial check for the purchase, in the account section of the check, show the following (this is an example): First check is $1000
Furniture (asset) $1000
Equipment (asset) $3000
GoodWill (Other Asset) $6000
Purchase Loan (Other Liability) -$9000.00
This would equal a net check of $1000
I'm sorry, but we really can't answer this without more info and you shouldn't be putting the info on a public forum.
We don't know if you bought a business from a person or a corporation or an LLC or what? We don't know what you intend to operate as for the tax payer entity type. If it is Sole Proprietorship-to-Sole Proprietorship, you didn't really buy a business. If it is a corporation, you bought shares and not the business. You would get the same bookkeeping that is in place already.
We don't know what the value of the assets are.
We don't know what you mean by "no liabilities." Apparently you do in fact have a liability because you are paying over time.
We don't know if there were outstanding vendor bills or collection to receive from customers.
We don't know the value of the business. You should have gotten this from an appropriate authority.
This is an accounting rules issue, not a QB issue.
Just because we do our own bookkeeping, we rely on professional guidance. Find a CPA to work with you.
