This article deals with the basics of posting the sale of a Speculative (Spec) Home in your bookkeeping.

This article only discusses how to close out or recognize the following:

• Revenues from sale of home.
• Close out Loan Payable.
• Recognize remaining loan interest due at time of sale.
• Recognize closing costs.
• Recognize the expense associated with the original Lot purchase.
• Close out current Lot asset account still in the books.
• Cash proceeds due to seller deposited into the bank account.

That being said, this article will NOT address closing out Construction in Progress to COGS. Please refer to an earlier post on this website that addresses this important task.

To begin, obviously you will need some sort of Closing Disclosure document that will give you all of the information, as outline above, regarding the sale of your Spec Home. Then it’s just a matter of posting the journal entry into your books that will recognize this event.

So, without delay, here is a basic example of a journal entry that addresses each outlined item above as referenced from a Closing Disclosure statement:

Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.