how to correct for starting amounts in liabilities

[Sandy]

We recently paid off the land that we purchased for our building. I have carried the payment each year as an expense for our reports and then made a journal entry at the end of the year to zero out the expense account and reduce our liability by the same amount.
When I do the journal entry for 2012 (haven't done it yet) there will still show an amount in the liability due to the fact that the numbers were not right when we set up powerchurch in 2010.
Can someone tell me how to fix this the correct way?
Thanks in advance.

[NeilZ]

We recently paid off the land that we purchased for our building. I have carried the payment each year as an expense for our reports and then made a journal entry at the end of the year to zero out the expense account and reduce our liability by the same amount.
When I do the journal entry for 2012 (haven't done it yet) there will still show an amount in the liability due to the fact that the numbers were not right when we set up powerchurch in 2010.
Can someone tell me how to fix this the correct way?
Thanks in advance.

I would do the journal entry for 2012, then add another journal entry to clear up the remainder with detailed notes on why there was a remainder. I suspect that this final entry will be an OOB (out of balance) entry, which should only be used (IMHO) when correcting errors such as this.

[Sandy]

Ok but how do you do an out of balance entry?

[NeilZ]

Ok but how do you do an out of balance entry?

The OOB entry is covered in the manual, but here's what Jeff said about it in another post:

Basically, if the reference begins with the letters OOB, you do not have to balance the entry. It will then save and post.

[Sandy]

Great! I did read the book but didn't see anything about the incorrect starting entry. I will look at it again to be sure I am doing the OOB entry correctly. Thanks again.

[Jeff]

You don't need an OOB entry in this case. The difference you will just offset to the unrestricted equity account.

So you will credit your expense account to zero it out, debit your liability account for the balance there. ANy difference you will offset to the unrestricted equity account.