Purchase of Investment Property

[Maf. King]

On Tue 25 September 12 19:54:13 oneworld wrote:
> I have spent 1 whole day searching on the internet, but haven't been able to
> find an answer. So can some one please help me with this. That will be very
> much appreciated.
> 
> I am purchasing an investment property. I have paid .25% holding deposit
> from my own money. How do I record this transaction (journal entries) ?  The
> questions that came to my mind are:
> 
> (i) Is the property an asset, considering that I have not got possession of
> the property yet ?

Hi,

I would record the deposit as an asset.  Assuming that the purchase goes 
through ok, and you don't loose the deposit, then it will become the asset 
price.  If it does fall through, then move it to an expense account at that 
time.  (IANAA, nor do I have any idea about Ozzie tax laws etc...)

> (ii) I have already paid the deposit but the loan transactions are yet to
> occur. So can I do a split transaction containing home loan transactions
> which will be occurring on settlement (in a few weeks time) ?
> 
> 

GC can't have a split txn with 2 dates (which is  what I think you are asking)  
I would have 2 txns, one for the deposit then one for the mortgage when it 
comes throngh.  You can create both transactions now and give one a future 
date (settlement date)

HTH,
Maf.