Recording the Initial Deposit Acquired via a Loan

by Cory
(Westville, IN)

Our church has taken out a loan for some building improvements.

Obviously, we've recorded the debit to cash and credit to a new Loan Liability account.

My question is, do we need to record that same value in a fund? If yes, what would be the offset?

Comments for Recording the Initial Deposit Acquired via a Loan

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Response to first comment
by: Cory

We use CDM+ by Suran Systems for churches. If I record this as a credit to a special fund, representing the reason/purpose why we took out the loan, what would I be debiting to offset that entry? I'm thinking it must be some other 'capital', so that we show a reduction in our total net worth. We used our church property as collateral for the loan, so maybe an offset to that value?

Fund Accointing

Yes, you need to designate the cash for the specific purpose, if that was indeed the intent of the congregation/elders. You don’t say what software your church uses, but there may be a "class" option if you are using Quickbooks, or a "dimension" if Intacct or other software. This allows you to segregate funds obtained for specific reasons. Another, less accounting theory structured, would be to establish a new bank account strictly for the designated repairs,

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