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theseajoker
February 25, 2023
Question

SMB Loan

  • February 25, 2023
  • 2 replies
  • 0 views

We received a SMB loan from our bank but the funds went to pay the seller of the business we bought.  How do we record this transaction?

Journal Entry 

Account - Bank Loan $350,000 credit

Account - ? - Debit

how do we record the debit that went to the seller to balance the JE?  The funds didnt go into our account, they went to seller 

 

2 replies

D
docsbp29
February 28, 2023

I think the company was actually purchased by the shareholders not the company. If that's the case then the debit is note receivable shareholder

Rainflurry
Rainflurry
February 28, 2023

@theseajoker 

 

The debit entry is what you bought for $350K (the allocation of the purchase price).  Was this an asset sale?  If so, allocate the $350K between the assets purchased (inventory, fixed assets, non-compete, goodwill, etc.).

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