New Construction

[Maranatha.Trsr]

I've read through many of the posts and am still not quite what to do in my case.
We are getting ready to add on to our church (about $900,000)
Currently we have one Fund with Temp Restricted Accounts:
Bldg 01-3210-101 Equity
Bldg 01-4210-101 Income
Bldg 01-4810-101 Release
We have an Asset Account:
Church Expansion 01-1630-000
We have an Expense Account:
Building Fund Expense 01-6310-101
I'd like to create Fund 03 for this Building Project until it is completed.
Can I have just expense accounts in Fund 03?
Would this work ? ie Invoice for $1,000
I would CR 01-1110-000 Checking $1,000
DB 03-6310-101 Steel Contract $1,000
DB 01-4810-101 Bldg Release $1,000
CR 01-4999-000 Restriction Release Account $1,000
Or do I need to keep all of the accounts on one transaction in the same fund?

We will be borrow some money likely from personal sources. Is it ok to put the $ in fund 01 as a loan or does it need to go in fund 03 also? (both the Liability and the Expense -- Interest accounts)
Thanks

[JohnDMeyers]

You need to keep things in the same fund. What you outlined won't work. (but it's close!)

You have the correct procedure for releasing temporarily restricted money.

What we have done is create Fund 03 for building expenses, and transfer money to it from Fund 01. The release comes when you make this transfer. All money in Fund 03 is deemed restricted for building, so you don't have to do any releases in Fund 03.

So, in your example where you need to spend $1,000 from Fund 03:

-----
Transfer money from Fund 01 to Fund 03 and release the restriction:
CR 01-1110-000 checking $1,000
DB 01-9120-000 Building Fund transfer $1,000

DB 01-4810-000 Building release $1,000
CR 01-4999-000 General release $1,000
-----
Receive the money into Fund 03:
DB 03-1110-000 checking $1,000 (or your account may be 03-1630-000?)
CR 03-9120-000 Building Fund transfer $1,000

Spend the money in Fund 03 (no further release necessary):
CR 03-1110-000 checking $1,000 (or 03-1630-000)
DB 03-6310-000 Steel contract $1,000


Note: 01-9120-000 and 03-9120-000 close-to unrestricted net assets (01-3110-000 and 03-3110-000, respectively)
Note: 03-6130-000 and all accounts in Fund 03 will also close-to unrestricted net assets

[Maranatha.Trsr]

Thanks John

DB 03-6310-000 Steel contract $1,000


Note: 01-9120-000 and 03-9120-000 close-to unrestricted net assets (01-3110-000 and 03-3110-000, respectively)
Note: 03-6130-000 and all accounts in Fund 03 will also close-to unrestricted net assets

Just to clarify is the 6310 & 6130 a typo or am I missing something?

When adding Fund 03 should all the accounts in Fund 01 be copied into Fund 03 or can I just copy or add only those accounts that apply?
(Checking, and building construction expense accounts, unrestricted net assets, Building Fund Transfer)

Harold

[JohnDMeyers]

It was a typo. I meant 6130.

[Maranatha.Trsr]

Thanks!
I appreciate your help.

[Melinda O.]

We are starting a building project but the bank will be issuing the checks (draws on the loan) to the contractors. How do I set set up the loan account. We will be borrowing up to $1.2 million and I would like to keep track of the draws made on the loan as we go along. All the posts I have found had entries affecting the checking/savings accounts as the churches were receiving checks from the bank or individuals. We won't actually be receiving any of the funds but our loan balance will be increasing.
Melinda O