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Old 09-28-2010, 02:34 PM
JFR JFR is offline
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Intangible Asset Setup

I'm starting a business where I've bought a distribution territory for let's say $10,000. I had to take out a loan and I would like to set this up as an intangible asset (Is this right?). How do I record this transaction? Any assistance would be greatly appreciated. Thank you.
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Old 09-29-2010, 02:17 AM
Joe Williams Joe Williams is offline
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A loan that you owe should be a liability account. If the loan is less than 5yr, use Other Current Liability type and for longer loans use Long Term Liability type.
Joe Williams
Piedmont, Ok
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Old 09-29-2010, 08:21 AM
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lisa_mn lisa_mn is offline
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And the intangible asset would be an Other Asset called distribution fee, or whatever.

As for how to enter it, follow the money: Did the bank pay it directly from your loan? Then just make a journal entry Debiting the asset and crediting the liability.

Did the loan money go into your bank account first? Make a deposit, hitting the loan account in the From account column.

Then the payment for the territory would be a check to whoever, with the account being the asset account.

Make sense? Follow the money!
Lisa Peterson
Streamline Consulting, Inc.
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Minneapolis, MN

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Old 09-29-2010, 10:10 AM
JFR JFR is offline
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Sounds good. I will give that a try. Thank you.
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