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purchasing property entry

Jung
Contributing User
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Contributing User
Australia
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purchasing property entry

Hi,

 

I have seen some articles regarding recording purchase of property.

As far as I understand the articles, both asset (property) and liabilities (mortgage) have to be recognised on the balance sheet.

At the moment, on the balance sheet,  there is an asset account called new office at cost which was paid when the settlement was done and also there is a mortgage liability account. As the company pays the mortgage, the liability amount is getting smaller. but not sure what to do with asset account, new office at cost.

Can we apply depreciation to the new office at cost? 

Please advice

 

Thank you

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2 REPLIES 2
Tracey_H
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Re: purchasing property entry

Hi @Jung 

 

Thanks for your post. You would need to discuss depreciation of the asset with your accountant. If you need assistance with how to record a depreciation journal please let me know which software you are using and I'll be happy to help.

 

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

Cheers,
Tracey
Previously @bungy15

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DuncanS
Ultimate Partner
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Re: purchasing property entry

@Jung @Tracey_H 

 

Jung,

 

I would include the Date of Purchase in the New Office Ledger name.

There should also be ledgers for Stamp Duty and Legals.

Have a Header, then the 3 ledgers underneath.

 

Make reference to the Settlement Sheet.

 

Reconcile the Mortgage Ledger on a quarterly basis, recording interest to the P&L.

 

To claim Depreciation, a Quantity Surveyor (QS) Report is required.

 

Speak to your Tax Accountant.

 

Duncan

 

Duncan Smith
Business Advice + Tax
Helping business owners build a better business since 1998
E expressgst@optusnet.com.au T 02 9904 3672 7 days

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