How to record a payment resembles a partial barter

[AWELCtreas]

First, we use Windows 7 and have version 11.55 of PowerChurch. Recently, we contracted to have a garage built on the church property with a total cost of $23,335. A Garage Fund income account was established and offerings that were collected for that purpose were placed in that account for that specific purpose. In addition, the decision was made that, since we would have the new garage and no further need for 2 of the 3 sheds that we owned, we would sell 2 of the 3 sheds and used the monies collected from the sales to help pay for the new garage. One shed was sold for $500 and that money was placed into the Garage Fund income account. The other shed was also sold for $200, but since it was sold to the contractor, everything would be taken care of with the settlement of the final payment. Checks written to this point that were related to the construction were paid from and released from that account. The payments have been made in this fashion: a down-payment of $11,000 was due and paid when construction was initiated; a 2nd payment of $5,475 was made a couple of weeks later; and the 3rd and final payment will be made later this week. The contract called for a 3rd payment of $6,865. Since the shed sold to the contractor was for a value of $200, the final check will be for $6,665 (elated the 5 is on the end of that figure). Since the final payment is composed of 2 exchanges with the check being $6,665, how should that transaction be recorded? We have an audit coming up and I'd really like to do this just once.

[Matt]

I would recommend posting the check as follows:

Debit: Either an asset account for the Garage or Garage Fund Expense $6,865.00
Credit: Checking Account $6,665.00
Credit: Garage Fund Income $200.00

I would put a note on the transaction saying that the $200.00 credit to the Garage Fund Income account was for the sale of the shed and since the shed was sold to the contractor, an agreement was reached that the final payment to the contractor would be reduced by the sale amount of the shed.