Our Balance Sheet needs to reflect the present value of the land and building which is $175,000. We were not using double entry bookkeeping at the time of the purchase, so therefore, we did not record the transaction on our books. I know that entry should include a debit to the fixed assets line item for building and land purchase. However, what should I credit since the loan is completed and there is no outstanding liabilities for this item. Thank you for any help.

Kornegay7

Seems to me that the credit would be to an owner's equity account or retained earnings or possibly common stock. Would need to know the type of entity.

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Originally Posted by MLSNC

Seems to me that the credit would be to an owner's equity account or retained earnings or possibly common stock. Would need to know the type of entity.

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What do you mean by "type of entity"?

Sole proprietors and partnership = owner's equity

Corporations = common stock or retained earnings

Dr. Land
Dr. Building
Cr. Loan Payable

Dr. Loan Payabel
Cr. Current account or cash

Dr. Retained Earnings
Cr. ACCUMULATED DEPRECIATION
This entry for the previously unrecorded depreciation expense for bulidings

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Originally Posted by MLSNC

Sole proprietors and partnership = owner's equity

Corporations = common stock or retained earnings

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We are a non profit organization