Trust and MYOB question

[Nominees]

I am entering some info into MYOB for my Hybrid disc. trust, and am left wondering....

When the trust sells 10K units to someone for a dollar each how do I enter the $10K into MYOB? (i.e. the Trust receives $10K)

Is it "Equity" or "Liability"?

(it surely can't be a "sale", I don't want to pay income tax on the sale of my own units !!! )

The person buying the units can clasify them as an "Asset", right?

Thanks,

Nom

 

[abcdiamond]

The 10k received will be entered in "Receive Money" and the account it will go to will be a "Liability Account" in that persons name.

It will not be treated as a "Sale" and will not therefore appear in a profit and loss statement.

It is purely a balance sheet entry.

Hope this helps

 

[DaleGG]

Hi

I treat the $10k as an equity (usually titled something like "Units Issued") because the trust has issued shares or units which provide certain ownership rights as well as income rights.

Dale

 

[abcdiamond]

I've just looked at my copy of MYOB, and I agree with Dale,

The account number sequence would begin with 3.xxxx, but that depends on what version of MYOB and which account set up you use.
I suggest a new header number 3.1000 called "Trust Capital " or similar,
And then individual postable accounts for each Trust member such as 3.1001 for member A, then 3.1002 for member B etc.

Being a user of Sage Accounting, I am not used to the term "equity" in the balance sheet. I always consider ANYTHING that the company or trust owes to anyone, as a Liability, and that includes capital introduced . Albeit a VERY LONG TERM liability.

 

[Nominees]

Hi abc and Dale,

Thank you very much for the info.

Nom