USA Record Condo Insurance Premium Financing?

Joined
Jun 1, 2023
Messages
1
Reaction score
0
Country
United States
I just joined our condo association’s finance committee. While reviewing our contracts, I found a financing agreement related to our insurance premiums. Our balance sheet does not show the loan. The liability was not recorded. The down payment of the loan was recorded as prepaid insurance. Monthly loan invoices were/are recorded as payables when received. The payables are reversed and recorded as insurance expense when paid. The costs associated with the initial financing and monthly interest expense were/are not segregated out and were/are recorded as insurance expense.

Should the financing agreement have been recorded as a liability? Should the financing costs and interest expense be recorded as insurance expense?

Thank you for your help.
 

kirby

VIP Member
Joined
May 12, 2011
Messages
2,448
Reaction score
333
Country
United States
Yes to first question. Second is no, those are not insurance expense but are interest expense.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top