Question
Sale of Business - How to report interest on loan to purchaser by seller
Client sold his vending machine route and equipment (truck and machines) for $100,000 with $25,000 down and payments of $1,000 plus $150 “interest” per month.
How do I account for the interest since this does not make sense as far as an amortization schedule and normal interest rate is concerned?
I just don’t know how to report the $150 of “interest.” Is it OK to go with what the buyer and seller agreed upon or do I need to figure out something different?
