User Support Forum

Posted: **Fri Sep 05, 2025 2:12 pm**

A non-profit has purchased the church building through a land contract, and we will hold the mortgage for 10 years. We didn’t loan the money to them directly. The non-profit will be paying monthly over 10 years, and there is no interest.

I have several questions on how to set this up in Accounts Receivable.

It seems that I need to create ONE INVOICE in Accounts Receivable that reflects the full amount.

So, if the implied loan was $1000 (for example purposes only)
CR 01-1110 checking account: $1000
DB 01-1137 "Money to be received": $1000 (Asset, Loan Receivable)
In the invoice, it wants an account to credit--so would it be the checking account (01-1110) then? However, doesn't this create a negative balance in checking? Or are there different accounts that I need to use?

I also have another question about Predefined Items. It asks for an income account, which is not appropriate because there is no income in this setup. Can I still use it? If so, would that be the checking or “Money to be received" account?

The last issue has to deal with Payments, which seems to be more straightforward (assuming the above is correct). Let's say that the monthly payment is $100.
DB 01-1110 checking account: $100
CR 01-1137 "Money to be received": $100
If I understand correctly, the debit account will be checking (01-1110) and the credited account would be "Money to be received" (01-1137)?

Thank you for your help!

Posted: **Sat Sep 06, 2025 2:20 pm**

MuncieFriendsChurch wrote: ↑
Fri Sep 05, 2025 2:12 pm
A non-profit has purchased the church building through a land contract, and we will hold the mortgage for 10 years. We didn’t loan the money to them directly. The non-profit will be paying monthly over 10 years, and there is no interest.

I have several questions on how to set this up in Accounts Receivable.

It seems that I need to create ONE INVOICE in Accounts Receivable that reflects the full amount.

So, if the implied loan was $1000 (for example purposes only)
CR 01-1110 checking account: $1000
DB 01-1137 "Money to be received": $1000 (Asset, Loan Receivable)
In the invoice, it wants an account to credit--so would it be the checking account (01-1110) then? However, doesn't this create a negative balance in checking? Or are there different accounts that I need to use?

I also have another question about Predefined Items. It asks for an income account, which is not appropriate because there is no income in this setup. Can I still use it? If so, would that be the checking or “Money to be received" account?

The last issue has to deal with Payments, which seems to be more straightforward (assuming the above is correct). Let's say that the monthly payment is $100.
DB 01-1110 checking account: $100
CR 01-1137 "Money to be received": $100
If I understand correctly, the debit account will be checking (01-1110) and the credited account would be "Money to be received" (01-1137)?

Thank you for your help!

Frankly, I'm not sure about that 'initial invoice'. The question is how do you account for the held mortgage. The mortgage can be looked at as an asset or a negative liability, that is money due the congregation.

Then how is the monthly payment treated? It can be looked at as a payment (income) for something sold. How will these funds be treated by the church?

I would ask someone who is an accountant for advice. Remind them that a church is operated on a 'fund account' or 'cash' basis not accrual, and that you will be holding a no interest note given by the non-profit. How do you account for the note, and how to you account for the payment.

User Support Forum

Land Contract "Loan" - Invoice - Accounts Receivable

Land Contract "Loan" - Invoice - Accounts Receivable

Re: Land Contract "Loan" - Invoice - Accounts Receivable