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I would like to know how to correctly enter the following…

I would like to know...
I would like to know how to correctly enter the following installment method transactions example in quickbooks online:Renting raw land that is free and clear for $200/month for 84 months. A separate option to purchase was bought by the renter in the amount of $3000.Example:Please consider following illustration example...
Assuming the cost/basis is $5000
The sale price is $19,000
So your gain is $19,000 - $5,000 = $14,000 -->> that is total gain
In the first year you received $3000
So under installment method - you will recognize the gain =
$14,000 (total gain) * $3000 (total proceeds in this year) / $19,000 (sale price) = $2210 -->> that is a part of the gain recognized in the first yearPlease let me know how to correctly enter this transaction so that the correct gain/loss is reflected in Quickbooks.Thanks,
Jay
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Answered in 2 hours by:
3/26/2018
Kelly McGlynn
Kelly McGlynn, Certified Public Accountant (CPA)
Category: Financial Software
Satisfied Customers: 31
Experience: President at Exceptional Bookkeeping Inc.
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Hello. Thank you for your question. I'm Kelly and am here to help you today. I am reviewing your question and will be with you shortly.

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Hi, based on the numbers your provided above (I did not recalculate anything), the entry to record the sale would be:

Cash (debit) $3,000

Note Receivable (debit) $16,000

Land (credit) $5,000

Deferred Income (credit) $11,790

Gain on Sale (credit) $2,210

Please let me know if you have any further questions.

Kelly McGlynn
Kelly McGlynn, Certified Public Accountant (CPA)
Category: Financial Software
Satisfied Customers: 31
Experience: President at Exceptional Bookkeeping Inc.
Verified
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