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Loan and fund accounting for a charity

  • 182 posts
  • # 115191

Hello


I'm struggling with how to account for a loan repayment. My client is a charity who made a 10 year loan of 25000 and repay 1250 (plus interest) every 6 months. They set up a fund for these repayments so when they pay an installment I have to account for the both the loan a/c and the fund a/c, but can only offset one of them from the cash a/c. Let's forget the interest for simplicity. I have

Cr 1250.00 (bank a/c)

Dr 1250.00 (loan a/c)

Dr 1250.00 (fund a/c)

Cr 1250.00 (??? a/c)

I've obviously got my wires crossed somewhere. Any clues?

Thanks





Edited at 16 Jun 2017 07:34 AM GMT

  • 6 posts
  • # 115193

Peter100 said:

Hello


I'm struggling with how to account for a loan repayment. My client is a charity who made a 10 year loan of 25000 and repay 1250 (plus interest) every 6 months. They set up a fund for these repayments so when they pay an installment I have to account for the both the loan a/c and the fund a/c, but can only offset one of them from the cash a/c. Let's forget the interest for simplicity. I have

Cr 1250.00 (bank a/c)

Dr 1250.00 (loan a/c)

Dr 1250.00 (fund a/c)

Cr 1250.00 (??? a/c)

I've obviously got my wires crossed somewhere. Any clues?

Thanks


Hi,


Sorry to know, you are facing bit trouble.


Well, a bit similar scanario I faced too. But what actually we used to do is:

 

Suppose, we are making payment of loan on every 1st and we have dedicated fund account for the repayment of loan.


First we will, on the same day do a bank transfer to Fund account.


Dr : Fund A/C (Increasing the fund account, write in description - money transfereing to fund account for the repayment of loan etc)


Cr : Bank A/C (Decreasing the bank)


Then after doing the above transaction 


Dr : Loan A/C (Loan repayment)

Cr : Fund A/C (Shows that loan is paid from fund account)


Hope this will help.



Edited at 16 Jun 2017 07:34 AM GMT

 

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