Accounting

[reynoldsroad]

We just recently added a new loan to our church. I figured out how to add the new amount into the liability account. So it shows $40,000 was deposited into that account. Now how can a set up an account that shows the whole amount so as we use it for expenses it shows how much we have left and what it was used for? I don't know how to do this without adding another $40,000 into an account which messes everything up.

[NeilZ]

We just recently added a new loan to our church. I figured out how to add the new amount into the liability account. So it shows $40,000 was deposited into that account. Now how can a set up an account that shows the whole amount so as we use it for expenses it shows how much we have left and what it was used for? I don't know how to do this without adding another $40,000 into an account which messes everything up.

Unfortunately, there is no easy way to handle this, as the money you're using is a loan and has to be paid back. If the expense is for a certain area, such as building expansion, or repairs, you could create a new expense account and set that account up with a budget that equals what you borrowed, then use that expense account when you pay bills. This way on the income and expense report, when you include the budget number, you can see what's been used.

I'm going to assume you used this process to load the liability account:

Receipt of funds:
Debit - 01-1110-000 checking
Credit - 01-2xxx-000 liability

So now you have the loan setup correctly as a liability, and any loan payments will debit the liability, debit an interest expense account (which I'm guessing you also setup), and credit your normal checking. say a payment of $100 with $10 of that being interest. That loan payment would look like this:

Debit - 01-2xxx-000 $90.00 Liability
Debit - 01-5xxx-000 $10.00 Interest Expense
Credit - 01-1110-000 $100.00 Checking

When you pay a bill using the loan funds, you would debit that new loan funds expense account and credit checking as normal. Using a $50 expense it would look like this;

Debit - 01-59xx-000 $50.00 Borrowed Funds Use Tracking
Credit - 01-1110-000 $50.00 Checking

The Interest and expense report (when you have the correct columns setup) would show that at the end of the month, you spent $50.00 of a $1000.00 budget with $950.00 left.

Does this help?

[reynoldsroad]

Thank you. Yes it does. I dd set up the account just like you said with in interest account too. I will try the budget feature and see if I can get it right. Thank you again.