How do you classify this situation detailed below?
An existing company has begun to work on another product and patent. The existing company has collected about 38k in expense for this development. The plan is to create a new entity, which will house this new product and patent. The expenses that we have already accumulated, we would like for the new company to pay and take on the expenses. However, at the end of the year this new company was not in place. On the existing books we do not want these expenses. So, can I bill out these expenses to the new pending company. Or, since I know it is not legally formed yet, can I list it on the balance sheet. If so, how should I classify. Work in process? Can you please assist?