Setting up a Loan

[lhbc-donate]

Re: Setting up a Loan
I have Searched and read everything about this topic on the forum. I have read so much that I'm not sure what is necessary for our circumstances.

Our church needed a loan. By the time all the paperwork was done we didn't need it anymore, but we want to invest it as we will need it soon.

Please check my steps and see what's missing

Create Liability accounts:
2. 01-2600 LONG TERM LIABILITY
4. 01-2605 Loan

Create an Interest Expense:
2. 01-5005 INTEREST ON LOAN
4. 01-5006 Monthly Loan Interest

Next would be to create another expense account ie "Roof Repairs" so we could pay the contractor but at the moment the loan we received is not needed. So I'm wondering if I'm missing creating some kind of account?
P.S. When we do need the money it could be for one specific thing or it could be used to cover all our monthly church expenses.

We have received the Loan so I will:
DB 01-1111 Chequing account (church operating)
CR 01-2605 Loan

I want to transfer the money out of our chequing account (asset) into a "Loan Savings Account" (asset) to get some interest on the money as I don't have any "Roof Repairs"
CR 01-1111
DB ? not sure, please advise

To Pay the Interest ONLY back each month
CR 01-1111
DB 01-5006

Thanks so much - I would be lost without God directing me to the FORUM

[NeilZ]

Re: Setting up a Loan
I have Searched and read everything about this topic on the forum. I have read so much that I'm not sure what is necessary for our circumstances.

Our church needed a loan. By the time all the paperwork was done we didn't need it anymore, but we want to invest it as we will need it soon.

Please check my steps and see what's missing

Create Liability accounts:
2. 01-2600 LONG TERM LIABILITY
4. 01-2605 Loan

Create an Interest Expense:
2. 01-5005 INTEREST ON LOAN
4. 01-5006 Monthly Loan Interest

Next would be to create another expense account ie "Roof Repairs" so we could pay the contractor but at the moment the loan we received is not needed. So I'm wondering if I'm missing creating some kind of account?
P.S. When we do need the money it could be for one specific thing or it could be used to cover all our monthly church expenses.

We have received the Loan so I will:
DB 01-1111 Chequing account (church operating)
CR 01-2605 Loan

I want to transfer the money out of our chequing account (asset) into a "Loan Savings Account" (asset) to get some interest on the money as I don't have any "Roof Repairs"
CR 01-1111
DB ? not sure, please advise

To Pay the Interest ONLY back each month
CR 01-1111
DB 01-5006

Thanks so much - I would be lost without God directing me to the FORUM

Yours is a somewhat different case, but I think these threads would help you:

viewtopic.php?f=3&t=4242&p=14704
viewtopic.php?f=3&t=3729&start=0
viewtopic.php?f=3&t=3380
viewtopic.php?f=3&t=3088

[JohnDMeyers]

We have received the Loan so I will:
DB 01-1111 Chequing account (church operating)
CR 01-2605 Loan
[correct!]

I want to transfer the money out of our chequing account (asset) into a "Loan Savings Account" (asset) to get some interest on the money as I don't have any "Roof Repairs"
CR 01-1111
DB ? not sure, please advise - 01-1120 (or some bank asset account) savings account

Note: To move money back to checking when you use it:
DB 01-1111
CR 01-1120 (or some bank asset account) savings account

To Pay the Interest ONLY back each month
CR 01-1111
DB 01-5006
[correct!]

To Pay the Interest and Principle:
CR 01-1111 $500 ($200 interest and $300 principle)
DB 01-5006 $200
DB 01-2605 loan $300

Note: If the nature of the roof repairs allow you to roll the repair money into the building asset, at the end of the year (or at the end of the project) you can make this entry to increase the value of your building asset on paper:
DB Building Asset $cost-of-asset-improvement
CR Roof repair expense $cost-of-asset-improvement