Loan in 2 Funds

[lhbc-donate]

Using version 10.4
We have 2 funds: 01 = General Fund and 02= Building Fund and I run my Balance Sheet report as "consolidated"

Original $10,000 loan was set up last year (but not accessed) in General Fund 01 as:
Db 01-1111 Asset
Cr 01-2605 Liability

Pay monthly interest:
Cr 01-1111
Db 01-5006 expense

Pay principle:
Cr 01-1111
Db 01-2605 liability

This year we got another $50,000 loan. The total loan of $60,000 was used this year for an expense to our Building Fund (02) although I have not yet transferred the $10,000 out of the General Fund into the Building Fund

I set up the 50,000 using both funds:
Db 02-1301 Asset
Cr 01-2605 Liability (defaulted a reminder that I was not using the same fund but allowed it)

Paid the invoice:
Cr 02-1301
Db 02-6111 (Building fund expense)

Before I get my self into a nightmare, I’ve thought about these issues and would like to know what is the best way to keep it simple.

1) The monthly interest is still going to be paid from the General Fund 01-5006 but now it will include the 50,000
2) Should I make a new Liability account in fund 02
3) In “maintain chart of accounts” - add account 01-2605 to fund 02
4) Need to transfer the $10,000 out of the General Fund into the Building Fund
5) In “maintain chart of accounts” - the Fund Balances (equity) shows as “this account is used in the following Funds” 01 and 02

[JohnDMeyers]

You gave a lot of details, and it would take me some time to think through all that you are trying to do.

I can easily tell you how I would do it, however, and you can use my suggestions and meld them into the way you want to proceed.

First off, I would undo this:
Db 02-1301 Asset
Cr 01-2605 Liability

This will only cause you headaches. Save the Tylenol and undo it.

You can undo it just the same way as you did it:
Cr 02-1301 Asset
Db 01-2605 Liability
and ignore the warning. (this is one warning I'm glad is there!)



Here's what I would do.

Transfer the cash balance (asset) to the Building Fund.

Keep the Liability of both loans in the General Fund. This is because I would eventually transfer the completed Building Project back into the General Fund when the project is over.

Spend all of the money out of the Building Fund. When you are done, most of the money will have gone toward the new asset. Some, however will go for fees, and other items that are not part of the final asset.

Any money in the Building Fund expense accounts that is part of the asset can be transferred from Fund 02 back into Fund 01 asset section after the project is finished.

[lhbc-donate]

Thanks John,
I'll work on the tutorials but for now, can you hold my hand a little longer please.
I undid it and added the 50,000 to our 01-1111 and Cr Liability 01-2605 (total Liab = 60,000)
Then transfered the 60,000 from 01-1111 Gen Fund to Bldg fund acct 02-1301 & ignored the warning.
I want to repay 10,000 back to the loan company. Correct entry would be Cr 02-1301 DB 01-2605
Thanks for your extreme patience! ...Carey

[JohnDMeyers]

There should not have been a warning when you did the fund transfer. If you did this:
cr 01-1111 $60,000
db 02-1301 $60,000
then you still get the slap with the wet noodle. jkjk (undo it, again, if you did this)

This is how the transfer should look:
cr 01-1111-000 $60,000
db 01-9101-000 $60,000

db 02-1301-000 $60,000
cr 02-9101-000 $60,000
note that there are two accounts transacted in each fund.

To pay back the $10,000 loan, where the liability is still in Fund 01, for a loan payment of $500 where $200 is principle and $300 is interest:
cr 01-1111-000 checking $500.00
db 01-2605-000 loan#1 $200.00
db 01-5346-000 loan interest $300.00

It doesn't matter that you've moved the cash to Fund 02 and the liability and payments are still in Fund 01. It would be good to reunite everything in Fund 01 after the building project is complete.

[lhbc-donate]

Hi John,
Re: Warning - getting the cash transfered from 01 to 02. You are right, "SLAP" - Although I did get the same end result in less steps. I will redo it correctly, thanks. But not having any success in my manual or forum/tutorials in regards to adding the new 9000 transfer accounts. Type & category are messing me up.

History: Last year our funds in 01 we running very very tight so we applied for a 10,000 loan called a "draw down line of credit". We had to access the min 10,000 last year. I added it to the Gen Fund 01 but never needed it .This year we needed a total of 60,000 to replace the furnaces. Because this was not in our budget (Gen Fund 01) and we do receive donations to our 'Building Fund" 02, I wanted to transfer the 10,000 we already had from 01 to our bldg fund 02 and have this all together in the bldg fund. Then, add a 50,000 loan to the bldg fund 02 so I could pay for the furnace invoice that I expensed out of Bldg fund 02.

Donations have been coming into the bldg fund 02 for the Furnace project and I can now "afford" to pay back 10,555 of the 60,000.
cr 02-1301 10,555 (your last email said cr 01-1111& I am hoping that you made a typo error)
db 01-2605 10,555

The loan company is taking my interest payment via electronic transfer
cr 01-1111 and db 01-5006 (a budget expense)

Are you exhausted yet? Thanks again for your hand ...Carey

[JohnDMeyers]

You should run a Balance Sheet report in each Fund. Make sure the Total Assets equals the Total of Liabilities plus Net Assets.

Run the report separately for each fund.