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General Accounting Discussions: Partial Sale of Company

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    • CommentAuthorelyule
    • CommentTimeJun 11th 2007
     
    I have a question. We sold part of our company and instead of getting cash for the sale, the buyer paid off some loans. SInce no cash changed hands, should cash be part of the journal entry, or what would the credit side be? The debit would be the loan. Thanks for any help!
    • CommentAuthoradaclarke
    • CommentTimeJun 12th 2007
     
    Hi elyule,

    What type of company is this? Some form of consideration had to be exchanged, did you exchange an asset, because the asset given would be credited, or maybe the buyer paid for ownership interest, than a knew capital account will be credited. This is the best I could do with the info given.
    • CommentAuthorelyule
    • CommentTimeJun 12th 2007
     
    It is a distribution company. We sold a region of our company, so the buyer received all the assets belonging to that territory. I'm guessing you are correct that a new capital account needs to be created.

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