Subsequent closings of the fund

Until the final closing of the fund which is the date of final close mentioned in the fund's LPA, usually 1 year from the intial closing date, GP will allow the admission of partners into the fund. These admission of partners in between the intial/ 1st closing & the final closing are know as subsequent closings (we can name them 2nd, 3rd, 4th ....... closings etc.) 

We account them similar to the 1st closings, commitment of the fund increases when we admit new partners into the fund in these subsequent closings.

But beside these entries we will calculate sub close interest & will charge interest to the new investors & that interest is accrued as income to the existing old investors during that subsequent closing. We will set off that accrued interest income to old investors in future capital calls or closings where we call capital from all investors.

The entries will be same as the entries booked on the 1st closing.

Receivable entry :

Capital call receivable a/c            Dr

Sub close interest   a/c                  Dr  

           To Capital contributions a/c

Sub close interest will be zero, as we will debit the old investors in user provided allocation with sub close interest expense & credit the new investors with the sub close interest income

Cash received entry :

Cash received a/c                         Dr

            To Capital receivable a/c

            To Sub close interest a/c 

Sub close interest credited as cash received from the new investor for capital call along with sub close interest.

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