Construction of a fixed asset with support from Altum
Company “A” has concluded a loan agreement with “Altum” for 70,000 euros for the construction of a fixed asset. The agreement provides for “A’s” participation fee of 1,000 euros. The construction of the fixed asset is carried out by company “B”, which issues an advance invoice for the construction part of the fixed asset – in the amount of 51,000 euros. “A” pays 1,000 euros, but the rest is paid by “Altum” on the basis of the loan agreement. Upon completion of the construction of the fixed asset, “B” issues an acceptance-transfer certificate and an invoice for the remaining amount – 20,000 euros. “Altum” pays this amount, which according to the terms of the agreement is the non-refundable part of the loan, and reduces the total loan amount. How to correctly record this transaction?
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