Community Forum Portal/Portail du forum communautaire
I was wondering how I can record a principal only loan payment, made by a third party?
We own 50% of a drill with our in-laws. The guys replaced the packers on the drill and sold the old ones at auction. Made a lot more than expected, so we took the money and applied it to our drill loan as a principal payment. The sale was made in our Dad's name, since he was set up as a seller at the auction. So he simple cashed the chq and then wrote a personal chq and made the pmt on our loan. So, I need to record this loan payment, yet no money went thru our account! How can I do this?
thanks
Anna
Hi Anna!
To accomplish this type of a payment, in the transaction entry screen, you will do what we call a "zero-dollar transaction". Set up a withdrawal with the date of the payment, and enter your reference and description. Leave the total at 0.00, so that no money goes through the bank account.
On the first line, use type L-, and make the principal only payment to the appropriate loan. Create a second line.
The second line is type C- (capital asset sale), class 8. Before you make this entry, you need to split the capital asset so that the old packers can be sold without directly affecting the original asset. This can be done through Setup > Capital Assets. In theory, the new packers will have already been entered as a capital asset purchase, so they should be in your capital asset list already. When you go to do this line, you will select the old packers to sell. In the amount, enter the amount you received for the cheque. It may not be the same amount.
Any remaining amount can go to personal draws/shareholder's loan, depending on whether you are a personal or a corporate farm
I hope this helps, let me know if you have any further questions!