Repayment of Moneys given from Church member to Church for Remodel Questions
I have a question, we are a small church in North Carolina.
At the time of this project, our church had no money for the renovation/repairs of the church and its preschool.
The church pastor/Church Board Members agreed in writing with a long time church member (who agreed to loan the needed money to the church to establish a preschool school within the church) agreed to pay for the remodeling needs for this project with an understanding that the monies would be repaid when the church received funds to reimburse her.
The member has paid $30,000 for the remodel/furnishings for the church preschool. I have all the documentation and receipts showing and verifying that $30,000 was spent for this project.
At this time, we have have preschool funds to reimburse this individual. The agreement also stated that the monies would be reimbursed $300.00 per month until the money is repaid.
Can you tell me how I need to journal this in the accounting system. I want to make sure it is entered correctly, so that there are no red flags thrown up in this case. Would I journal it the same way as I would a bank loan or car loan?