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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4545
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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What account to I use to add an updated appraisal to our

Customer Question

What account to I use to add an updated appraisal to our accounting for double entry?
Submitted: 1 year ago.
Category: Finance
Expert:  Rakhi Vasavada replied 1 year ago.

Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

Such updated / additional appraisal fees would be amortized over the life of the loan / mortgage.

Most loan fees need to be amortized over the term of the loan, so if the loan is a 10 year loan, you would only write off 1/10 each year, so you wuld set the loan fee up as an "Other Asset" account, titled "Loan Fees" and then each month or year depending upon how often you want to record it and run financial statements, you would write off the portion for that period, in example, you would record the loan fee when you pay the fees (debit he Loan Fees account and it would be a credit to your checking account) and then each period you would do a journal entry debitng the Current Year Loan Fees (expense account) and crediting the Loan Fees (other asset account).

I am sure this would help.

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Warm Regards