Hello,
We are a non-profit who owns three properities. The accounting system that was used before never had the properties on the general ledger. I want to add the properties with the purchase prices. They are all owned outright by us. I set up three fixed asset accounts - one for each property. So do I do a journal entry and debit the fixed asset account for the purchase price but what do I credit? Thank you for your help.
It's not clear whether the properties are vacant land or land with a building. If the latter then the account structure should look something like this (all accounts are fixed asset tyep).
Address
>> Land
>> Building
>> >> accumulated depreciation building
Land is never depreciated, but the building is.
Depreciation is optional, it does not have to be taken, but it does have to be taken when the building sells or meets some other calamity. If you have not ever taken annual depreciation and depreciation expense, then you really should get with a tax accountant and see what you can do to get caught up.
The journal entry would be debit fixed asset and credit owner equity
Enter your E-mail address. We'll send you an e-mail with instructions to reset your password.