Behind the question-From an employee’s paycheck we create a liability for the amount held from the check to pay the monthly payment back to the F2 fund.
The first transaction originates from Payroll and is in Fund 1
F1 1121- deposit account 203.33 Debit
F1 2110- Loan to staff liability 203.33 Credit.
The actual money for the loan came from Fund 2. This 203.33 must be transferred to Fund 2 to repay the loan plus interest.
F2 1212 deposit account- 203.33 Debit
F2 –1311 Loan to staff 200 Credit
F2- 4652 Interest Income 3.33 Credit
The missing link is getting the amount held in F1 to F2.
Is the simple solution:
F1 1121- deposit account 203.33 Credit
F1 2110- Loan to staff liability 203.33 Debit
F2 -1212 deposit account- 203.33 Debit
F2 –1311 Loan to staff 200 Credit
F2-4652 Interest Income 3.33 Credit
Or do I need a transfer from F1 to F2, and if so, how do I transfer to an income and 2 asset accounts (Deposit up and Loan Receivable –down)
I do not think this plays into the answer, but Fund 2 is set up so all special funds have their own fund balance account with, income, release and expense accounts for each separate fund.