I own a rental property that includes asset (equity) and liability (mortgage) that i would like reflected in the accounting somehow in order to track the overall value of my LLC. I can't figure out how to do this in Wave.
At Socorro Integrated Services, we would be glad to help you out on your challenges with your chart of account on wave app. We have vast knowledge of wave environment 2017 and more than 5 years experience in accounting consultation.
Contact us via email - [email protected] further discussion and understanding.
I'm a Chicago based accountant of 30+ years experience, in private practice since 2011. I've been a Wave Pro adviser since 2013 and am quite adept at navigating the platform's functionality.
Prior to launching my practice, I worked as an employee with national and regional consulting groups for corporate clients across a range of of industries. One such was real estate and property management. While I've worked with less than a half dozen small business owners in this area through my practice, I've encountered a surprising resistance to establishing records keeping practices appropriate to the industry.
I'm happy to assist you in properly structuring your balance sheet (that's essentially what you're asking for here) and in understanding the types of transactions you'll need to record and how to go about doing that.
Its not hard to do this. Just pass a journal entry to book the asset and liability
Debit the Property
Credit the Mortgage
After that for monthly payments you will get a slip from bank which shows how much you pay principle and interest than pass this journal entry
Debit Interest expense
Ali's explanation for booking the asset is way off the mark. The value of the property is whatever the purchase price is, plus any capitalized closing costs. However, since land can't be depreciated, the FMV of the land must be deducted from that amount. What's left is what gets depreciated.
If the down payment wasn't made with personal rather than business funds, that portion is booked to owner's equity. The mortgage is the remaining cost that was fronted by the lender.