User Support Forum

30th July, 08


I would like some advice how to handle the transaction pertaining to loan advance received for replacing the roof with repayment of $ 400.00 monthly basis for a period of 16 months.

Should I open a seperate Chart of Account for this particular transaction?

The amount loaned is being deposited to our main General Operating Account.

Thanks in advance.

Osvaldo De Souza

oztheguitarman wrote:30th July, 08


I would like some advice how to handle the transaction pertaining to loan advance received for replacing the roof with repayment of $ 400.00 monthly basis for a period of 16 months.

Should I open a seperate Chart of Account for this particular transaction?

The amount loaned is being deposited to our main General Operating Account.

Thanks in advance.

Osvaldo De Souza

This thread may help you out:
http://www.powerchurch.com/forum/viewtopic.php?t=3243

2nd August 08

Thanks for your advice.

Please let me know if the following steps are correct:

a) Create a new account under ' LONG TERM LIABILITIES ' say 2600 LOAN FOR ROOF REPAIRS
b) Create a new account under " GENERAL EXPENSES " say 5591 INTEREST ON LOAN FOR ROOF
c) Create a new account under ' GENERAL EXPENSES ' say 5592 ROOF EXPENSE ACCOUNT

1) PROCES FOLLOWING TRANSACTION WHEN LOAN IS RECEIVED

DEBIT Main Bank Operating A/C 01-1110-000.....$ 6500.00
CREDIT LOAN A/C 01-2600-000.......................................$ 6500.00

2) PROCESS FOLLOWING TRANSACTION TO PAY CONTRACTOR

CREDIT Main Bank Operating A/C 01-1110-000.................$ 6500.00
DEBIT LOAN A/C 01-2600-000.........................$ 6500.00

3) PROCESS FOLLOWING TRANSACTION TO PAY BACK LOAN ON MONTHLY BASIS (Say Principal Amount $ 400 and Interest $ 25.00)

CREDIT Main Bank Operating A/C 01-1110-000.................$ 425.00
DEBIT ROOF EXPENSE A/C 01-5592-000.....$ 400.00
DEBIT INTEREST LOAN A/C 01-5591-000....$ 25.00

Please let me know if these transactions are OK to process before I decide to pass these entries next week.

Thanks for your prompt reply.

Regards

Osvaldo

Your first entry is correct. On the second entry the debit should be to account 01-5592-000. On the third entry the debit for $400.00 should be to 01-2600-000.

2nd August, 08


Matt,


Thank you very much.

Regards

Osvaldo