Insurance book of business

[kavrev]

I have a new Scorp client that purchased a book of business in 08. Client put a down payment and is making payments on the balance. The purchase price was one year commissions.

I know its an intangible, depreciable over 15 years, but client is making me question this. The problem is the net income of the business this year is very high because its not reflecting the payments to the carrier for the business.

Anyone familiar with this scenario? I am questioning my original journal entry for the purchase.....cr cash for down payment, cr loan payable, dr asset acct.

Is there anyway to reduce income for the payments made for the book?

[ChEAr$]

Just like buying a tax practice

I have a new Scorp client that purchased a book of business in 08. Client put a down payment and is making payments on the balance. The purchase price was one year commissions.

I know its an intangible, depreciable over 15 years, but client is making me question this. The problem is the net income of the business this year is very high because its not reflecting the payments to the carrier for the business.

Anyone familiar with this scenario? I am questioning my original journal entry for the purchase.....cr cash for down payment, cr loan payable, dr asset acct.

Is there anyway to reduce income for the payments made for the book?

Cost of the "book" is amortizable (not depreciable) over the 15 years, and pro rated per
month of first and last year.