I just purchased land for a newly created company. Are the settlement charges included in the purchase price of the land when I list the asset value in my books? Also, I did work for the previous owner that he needed done in order to sell the property. I keep a running total of the work I did, and it came off the purchase price at settlement as earnest money. How do I handle that in my books?

Depending on what's included in the settlement costs, you should be able to include them. Things like commissions, surveying fees, etc. are included. If there was anything included like prepaid insurance or property taxes or that type of thing, that wouldn't be included. One way to see the difference is whether it was a one-time thing included in the purchasing process, or something that is going to be replaced or paid over and over into the future.

As for the earnest money -- that's a little weird. If your company paid earnest money, that should have been put into an asset account -- it's like a deposit. Instead of receiving that back, you had it reduced from the purchase. That would create a credit to the deposit account and an equal amount added to the debit of the land when it's recorded.

However, it sounds like someone got screwed out of actually getting paid for that work. Even if you did the work in the name of your company -- that is, this would have been revenue on the part of your company -- using it as earnest money means your company never got paid for the work. The company should get both. They should get paid for that work and get their earnest money back. It doesn't matter that it was a reduction off the land purchase, which amounts to the same thing. But you have two things: work and earnest money, and sounds like you only got one. If you did the work on a personal basis, then you never got paid.