User Support Forum

We're in the middle of a building project and some members have offered to loan necessary funds until after we receive occupancy permit.

I'm trying to figure out how to set up in PC+ Version 11.5

The accounts I think should be used are:
01-1210-000 Money Market Account DB $11,000.00
01-2720-000 Construction Loan 1 CR $11,000.00
-- Also 01-2720-000 when setting up the new account I'm not sure if I should allow the account to use donor restricted funds or not.

Should the funds be added to our Temporary Restricted Building Account? If so how?
Equity account is 01-3210-101
Income account is 01-4210-101 closes to 01-3210-101
Release account is 01-4810-101 closes to 01-3210-101

Harold

The fact that the money was loaned to the church and expected to be paid back eliminates the possibility of a tax deduction and also eliminates the need for a donor restriction. It is not a charitable contribution.

I assume it was loaned on an interest-free basis.

Therefore, you have the correct accounts: i.e. DB 1210 and CR 2720

John,
Thanks for confirming the accounts.
You're correct - this is a loan not a donation.
Interest will be paid out at payoff (within 6 months of occupancy permit).
In the year that the interest is paid, I'll issue a 1099.(by Jan. 31 of the following year)

I guess my concern was should the loan be included in the building fund account on the balance sheet?

The congregation and leadership team is looking for the available funds for the project:
I can simply add the amount of the temp. restricted building fund ($150,000) and the loan amount ($11,000) to tell them the available amount is $161,000 but thought that it should be shown another way on the balance sheet.

I wanted to start out showing this correctly.

I don't think there is a right or wrong way with respect to accounting.

You can put the loan in the General Fund or the Building Fund, whichever serves your needs better.

It seems to me, putting it in the Building Fund would be better in the sense that your balance sheet will show all of the available money in one place.

Thanks for your common sense advice!

Sometimes I try to make this harder than it needs to be.

Sure thing!

When you want to pay the interest, use an expense account, like 5870-000 or something.