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- Jun 10, 2013
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Good afternoon. I think I've done extensive research and can not find anything that clarifies a difference between Due To/From or Long Term Liability (Notes Payable). It seems like Due To/From are ONLY for subsidiaries and for basics, Long Term Liability/Notes Payble is just a loan, longer than a year.
Scenario: Business-Franchise (restaurant) has invested into two restaurants that have been opened under the franchise agreement. All three, Franchise and other two restaurants that it is invested into, have their own FEIN, separate entities. The Franchise has Other Asset set up for the money has been lending to the other two restaurants, which have a liability acount set-up for that tracking.
Is this technically a Due To/From or should it just be set-up as a regular Notes Payable?
Question 2: What is the "agreement" that should be drafted as a result of the long term liability, interest rates, agreement format, etc? Any and all important details would be greately appreciated. I look back at my accounting books and my reading seems to be general in this area, nothing that is specific to this scenario.
Thank you
Scenario: Business-Franchise (restaurant) has invested into two restaurants that have been opened under the franchise agreement. All three, Franchise and other two restaurants that it is invested into, have their own FEIN, separate entities. The Franchise has Other Asset set up for the money has been lending to the other two restaurants, which have a liability acount set-up for that tracking.
Is this technically a Due To/From or should it just be set-up as a regular Notes Payable?
Question 2: What is the "agreement" that should be drafted as a result of the long term liability, interest rates, agreement format, etc? Any and all important details would be greately appreciated. I look back at my accounting books and my reading seems to be general in this area, nothing that is specific to this scenario.
Thank you