I am still learning double-entry accounting, and I need a little help.
I recently purchased a home, but the price was reduced during
negotiation and a seller credit was applied at closing.
Agreed Purchase Price: $100,000
Seller Credit for Repairs: $5,000
Actual Purchase Price: $95,000
When I add this asset, I am stumped. When I increase the asset by
$100,000 and decrease other accounts for cash and loans of $95,000, that
all makes sense. But how do I account for the $5,000? I see it as an
unrealized gain... instant equity provided by the seller. But I need to
debit an account with this amount, so it shows an unrealized gain of
-$5,000.
Should I simply just increase the asset by $95,000 and not account for
the credit?
I know I am missing the big picture. Can anyone point me in the right
direction?
Thanks to all,
Mike
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