We own the Mortgage note for a house that the owner makes monthly payments on. Our CPA indicated the the mortgage is an Asset and should be classified as notes receivable income. How do I set this up in PowerChurch? When the payment is received as income we will need to spit it into principle and interest.
Please advise.
Michelle
Mortgage Receivable
Moderators: Moderators, Tech Support
Re: Mortgage Receivable
I'm surprised the CPA didn't show you how to do this.TechMedia wrote:We own the Mortgage note for a house that the owner makes monthly payments on. Our CPA indicated the the mortgage is an Asset and should be classified as notes receivable income. How do I set this up in PowerChurch? When the payment is received as income we will need to spit it into principle and interest.
Please advise.
Michelle
OK ... I'm assuming that since you're holding the note, that the church lent the money?? So this is a negative asset, with the principle payment paying back the loan, and the interest is income?
Neil Zampella
Using PC+ since 1999.
Using PC+ since 1999.
Re: Mortgage Receivable
The mortgage note was actually donated to the church. So I'm guessing that's why the CPA considered it an asset. We don't owe any money to anyone for the mortgage note. The payments are income to us. I need to track the principle payment and the interest income so that I can give the owner a 1098 at the end of the year.
Re: Mortgage Receivable
Wow .. in that case its all income to the church. Not sure you need to reflect it as an asset since there's nothing tangible that the church owns, other than the income.TechMedia wrote:The mortgage note was actually donated to the church. So I'm guessing that's why the CPA considered it an asset. We don't owe any money to anyone for the mortgage note. The payments are income to us. I need to track the principle payment and the interest income so that I can give the owner a 1098 at the end of the year.
Did the CPA say that that was the way to do it when you're running on a CASH basis, not accrual as normal businesses? I'm afraid I'm not sure how to set that up in the system, you may want to ask the CPA if they have any ideas.
In any case, as far as the payments, I would setup the Accounts Receivable module and create two Predefined Items, one for the principle payment, and one for the interest. In this manner you can give the person a paid invoice (or issue one if needs be). You should also have two income accounts setup in Funds Accounting, again one for each part of the payment.
This will give you an easy way to track the amounts paid each year.
Neil Zampella
Using PC+ since 1999.
Using PC+ since 1999.