I recently purchased a bread route business and am wondering how to properly record the transaction in QB. There were no assets involved. I only purchased a territory to operate in.

Cost of business was $160k
I paid $46k cash
$114k is bank financed
How should this be recorded and what account types do I need to create? Any help would be greatly appreciated.?
submitted by Eric

BforEvermore

To record the purchase of the bread route in QuickBooks, you should create a journal entry that reflects the cash paid and the financed amount. Since no physical assets were involved and you acquired only the rights to operate (the territory), the transaction can be recorded as an intangible asset or a business purchase. Here's one way:

Create an Asset Account:
Name: "Intangible Assets" or "Business Rights" (Type: Other Asset)
Amount: $160,000
Record the Cash Payment:
Debit: "Intangible Assets" – $46,000
Credit: "Bank" (Asset account) – $46,000
Record the Bank Financing:
Debit: "Intangible Assets" – $114,000
Credit: "Loan Payable" (Liability account) – $114,000

This approach capitalizes the purchase price as an intangible asset, which reflects the value of the territory, and it also records the liability for the financed portion. Make sure to consult with your accountant. Not financial advice, yadda yadda.

etude

So, since you bought just the territory and no physical stuff, you can think of it as buying a kind of "business rights." In QuickBooks, you'd set up an account called something like "Intangible Assets" or "Business Rights" to keep track of that $160k.

Here's what I'd do:

Record the $46k you paid in cash as a debit to "Intangible Assets."

Record the $114k you financed as a liability, so make a liability account called "Loan Payable" and credit that amount.

The total $160k gets recorded as the value of the "Intangible Assets" account.

This way, you're showing that you own a right (the territory) worth $160k, partly paid with cash and partly financed. Good luck with your route!