Singing Pig

Hello Everyone

I'm doing my accounts and I can't think where a remortgage on a residential B2L should go.

As debt is not income then it is capital introduced?

I was told "Remortgaging is a balance sheet transaction. All you are doing is swapping a Creditor for another Creditor.

The variation in the Creditor amount should match the change in the bank account."

"HOW" I ask

"If you don't know how then it's too hard to tell you" they say!!!!

But a balance sheet is done at the end of the year and I need to balance my cashbook NOW.

I have £50,000 more on the credit side than the debit side.

How should I enter this correctly first off?

What software could I use that will do this and everything else?

(Last resort could I just have a second 'Capital introduced' column to cover remortgages)

Thanks

Paul

Paul,
 

Dont worry too much your accountant will be able to spot whatever you have done wrong in about 30 seconds flat if they are any good. 

 
Just stick it on the question list when you send them over. The transaction should be to increase your debt (long term creditors) and your cash balance. When dealing with property you often don't see the money as it doesn't physically arrive in your accounts (ie payment for a deposit on another property) which is probably where you are going wrong. i don't ask my clients to do any double entry as it just tends to confuse matters!

Regards,
 

Hello James

Even though I will be using an accountant (maybe you could help) I always like to understand what it is I am dealing with.

Is there any good books dealing with accounting for a property business as all the books I've read don't cover property purchases?

 Thanks

Paul

Paul,

I don’t believe there are any specific books about accounting for property purchases as this is simply part of the general accounting principles of double entry bookkeeping. The answer is probably to have your accountant go over one transaction with you and you to copy it for subsequent ones as they should be helping you with all the tricky bits. More generally double entry bookkeeping is normally not really necessary with a property business unless you have a huge number of transactions, a simple reconciled cash book will normally suffice rather than using something like SAGE.

If you aren’t currently represented I would be happy to have a chat about your circumstances in more detail and what records are required.

Regards,