Statement of Adjustments (against vendor) for purchase of a business

[RRB26]

I have an unusual situation I am hoping someone can help with.  We purchased a branch of a business.  The business we have purchased from has offered Vendor Finance (an unusual enough transaction itself these days) The vendor financed purchase price was broken out and entered into the relevant accounts in the myob Accounts list, ie a liability account for the loan itself and then separte accounts for plant and equip (X dollars), goodwill (x dollars) and stock (x dollars).  Two months after this was all set up, the Vendor's solicitor has sent the final Statement of adjustments through, this adjustment is for leave owed and long services owed, they had to pay to us by way of deducting the amount off the sale price, 75% of the value of accrued leave.  So the amount of $7624.52 needs to be deducted from the loan amount.  As payments have already been made against this account myob won't let me change the opening balance.  If I create a new account called Statement of Adjustments and enter the $7624.52 as an opening balance and then try to journal it across to the vendor finance loan amount (to reduce it) it puts the amount in historical balance as well.  The journal entry clears the new Statement of Adjustments account but leaves the amount in historical balance.  If I open the new account with the adjustment balance (and it puts the amount in historical balance) if I journal from historical balance and clear that to zero and take the amount off the loan it leaves the amount still showing in the new adjustments account.  Normally I am pretty good with myob, I have been using it for over 6 years but this one really has me confused.  Am I missing something really simple?  Any ideas would be appreciated.  Thank you in advance.

[Mike_James · Accepted solution]

Hi @RRB26 , a journal entry which debits the loan account and credits a liability account for holiday pay will do the job here. Date as at the agreement date or the beginning of your file. This new liability being only 75% of your actual liability you may wish to increase that, for which a journal entry debiting your current expenses and crediting holiday pay liability will be required. However, there could be tax implications around these entries, so you should confirm them with your accountant. 

[RRB26]

Hello Mike,

Thank you, that makes perfect sense.  I will as you say discuss it with our Accountant to if there are any implications of doing this.  Thank you for your help.