Accounting for an Interest Free Loan

[newsboy9]

John can you walk me through how to set this up?

We just had someone give us an interest free loan for some repairs and I'm at a loss for how to account for it in PowerChurch. My first thought was just to put it in as a liability but that doesn't seem right. I kind of need a step by step if possible.

1. Put the loan into the fund
2. Track expenses paid with the loan money.
3. Make payments on the loan.

Thanks

[NeilZ]

John can you walk me through how to set this up?

We just had someone give us an interest free loan for some repairs and I'm at a loss for how to account for it in PowerChurch. My first thought was just to put it in as a liability but that doesn't seem right. I kind of need a step by step if possible.

1. Put the loan into the fund
2. Track expenses paid with the loan money.
3. Make payments on the loan.

Thanks

a) Its an interest-free loan, so really the only expense you have with the loan is paying back the loan. It is a liability, so you definitely need that account.

b) Since you need to track the expenses paid, you need to have a temporarily restricted account you can release funds from to track the funds flow to the expense.

c) Then you need an expense account to show the payback.

This is covered in this thread:

viewtopic.php?f=3&t=1377

The only area you don't need to worry about is the interest expense. Matt's last entry in the topic will probably help you the most. There he refers to an income account, you want to track payments from this money, so make that an restricted income account. The details on how to do that is in the manual and built-in help.