Loans Receivable (sdw)
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Loans Receivable (sdw)
How do I zero out a loans receivable in Power Church? When Power Church was set up a loans receivable of $20,417.08 was entered as "other assets". The church has decided to "forgive" this loan. No payments have been made on the loan since it was established in Power Church a year ago. Thanks.
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Jeff
- Program Development
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- Joined: Fri Sep 05, 2003 11:43 am
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Re: Loans Receivable (sdw)
To zero out the loan in PowerChurch, you would credit the loan receivable asset account and either debit a loan forgiveness expense account. By debiting an expense account it will be shown on the income and expense report as an expense to the church.
If the board does not want to show this on the income and expense report, you could debit the unrestricted equity account. Normally you would only put a transaction to the equity account if you are correcting a prior mistake in setup. Sounds like this was legitimate receivable so I am not sure exactly how appropriate crediting the equity account would be and suggest you talk with someone who can help you work through the particulars.
There also maybe tax consequences for forgiving a loan, so you will probably need to work with someone qualified to address those areas as well.
If the board does not want to show this on the income and expense report, you could debit the unrestricted equity account. Normally you would only put a transaction to the equity account if you are correcting a prior mistake in setup. Sounds like this was legitimate receivable so I am not sure exactly how appropriate crediting the equity account would be and suggest you talk with someone who can help you work through the particulars.
There also maybe tax consequences for forgiving a loan, so you will probably need to work with someone qualified to address those areas as well.