How to Record Seller Financing on Property Sale
Journalizing the disposition of a property where the REIT provides a mortgage note to the buyer as part of the consideration.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Notes Receivable - Seller Financing | Asset | 2,000,000.00 | - |
| Accumulated Depreciation | Contra-Asset | 500,000.00 | - |
| Investment Property | Asset | - | 2,200,000.00 |
| Gain on Sale of Real Estate | Revenue | - | 300,000.00 |
💡 Accountant's Note
This entry records the removal of the asset and its depreciation, the recognition of a note receivable from the buyer, and the resulting gain on disposal.
Practitioner & Systems Framework
💻 ERP Architecture
Record the note in the Notes Receivable sub-ledger and link it to the asset retirement entry.
⚠️ Audit Flags
Revenue recognition timing under ASC 606 if the buyer's initial investment is insufficient.
📄 Required Documentation
Purchase and Sale Agreement (PSA), Promissory Note, and Title Transfer documents.
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Discussion & Community Questions
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