Double entry for fixed assets - please help!

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hello,<BR><BR>If a company that was a partnership became a limited company, the latter company would retain the fixed assets. When setting up the accounts from new for the limited company, what would the double entry be for the fixed assets, because they have obviously already been paid for, so there is no crediting of the bank a/c. My brain just isn't working to get this in my head today!<BR><BR>Any help would be greatly appreciated.<BR><BR>Many thanks,<BR>Reb

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Double entry for fixed assets - please help!

    Hi<BR><BR>Not to clear on the aspects of accounts for a new company myself, however are the directors of the new Ltd. company the previous partners? If so then the directors loan or capital account may be relevant.<BR><BR>Neil
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Double entry for fixed assets - please help!

    Presuming that it is the owner of the old sole trader business who has set up as a limited company, then the entry would be:<BR><BR>debit the Fixed assets, and credit the director's loan account in the creditors section of the balance sheet.<BR><BR>This is because the director used to own the fixed assets, and the company (as a separate, if imaginary, person to the director) now owes him for them. <BR><BR>Hope this helps,<BR><BR>Shushana

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