Sold home on which home loan is taken.
Half loan is paid. Reamaning will be paid by buyer?
What will be entry in book?
6 Replies
prasad Nilugal
( GST Practitioner & Accounts )
(14805 Points)
Replied 08 February 2023
If Asset is in your balance sheet , and for example you sold Home to Mr A then pass the entities as follows.
1) Bank A/c Dr
To Asset ( Home)
( Being Asset sold )
2) Loan. A/c Dr
To Bank A/c Cr
( repayment of half loan)
3) Loan A/c Dr
Loan paid by A A/c Cr
( remaining loan payable by Mr A )
Loan paid by A A/c ( Byer) will be under Indirect Income profit and loss account.
1) Bank A/c Dr
To Asset ( Home)
( Being Asset sold )
2) Loan. A/c Dr
To Bank A/c Cr
( repayment of half loan)
3) Loan A/c Dr
Loan paid by A A/c Cr
( remaining loan payable by Mr A )
Loan paid by A A/c ( Byer) will be under Indirect Income profit and loss account.
prasad Nilugal
( GST Practitioner & Accounts )
(14805 Points)
Replied 09 February 2023
If the house Building is for business purpose, after deducting Depreciation ( WDV from 1st April to date of sale) balance profit will be credited to profit and Loss account. . so 1,St entry will be
Bank A/c Dr
Depreciation A/c Dr
To Asset ( Home) A/c Cr
To profit on Sale A/c Cr
( Asset sold , profit credited after Depreciation)
Profit on sale will be transfer to profit & Loss Account
profit on sale A/c Dr
To profit & Loss A/c Cr
( Profit transfer to P&L )
Depreciation will be transfer to P& L entry
Profit & Loss A/c Dr
To Depreciation A/c Cr
( Depreciation transfer entry )
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 09 February 2023
Sale Entry
Buyer A/c (Sale value)
To House
To capital (Profit)
payment rec entry
Bank A/c (amount received in bank)
Home Loan(loan paid by buyer)
To Buyer
Buyer A/c (Sale value)
To House
To capital (Profit)
payment rec entry
Bank A/c (amount received in bank)
Home Loan(loan paid by buyer)
To Buyer
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