Line of credit entry

[DanL]

Hi,
This is an awesome forum! I learn alot just reading the posts!
I would like to know how I can enter a line of credit so it reports properly in the cashflow report. The line I am using is monies from a credit card factoring company. The line is paid back off of every M/C Visa card sale.

Thanks in advance.

Danl

[LauraG]

We set ours up as an "Other Liability" and put on the books the amount of cash used initially.

Each month we post a Payment to this account for the full amount of the payment (Debit LOC/Credit Cash).

I use a journal entry to debit Interest expense/Credit LOC for the amount of interest paid as shown on the statement (ours is from AMEX).

Any additional funds used will debit expense and credit LOC as if this was your cash account.

Just make sure that at the end of the month your balance matches the LOC statement BEFORE your current month's payment is taken out.

[Markr1306]

Originally posted by DanL
Hi,
This is an awesome forum! I learn alot just reading the posts!
I would like to know how I can enter a line of credit so it reports properly in the cashflow report. The line I am using is monies from a credit card factoring company. The line is paid back off of every M/C Visa card sale.

Thanks in advance.

Danl

What I would do is for every sale via MC/Visa instaead of Dr i would enter cash recepit but instaead of dr the cash account dr the Line of Credit Liability account. Now how you enter the recepits either via daily batch or transaction by tranction is up to you.

For every advance on the line of credit Iwould enter it as a cash reciept but instead of credit sales or AR I would credit the Line of credit liability account.

You should have the Line of Credit liability already set up as a liabilty

Mark

[jrmi01]

When recording our bank line of credit deposits via a "Receipts" entry, our "Taxable/Exempt Sales Report" now includes the amounts as part of total sales overinflating the actual sales numbers.

Should we correct this through journal entries?

To avoid in the future, is the best plan to creat the "Other Liability" account as was discussed earlier in this thread?

pb

[gale]

On your "Receipts" transactions you are using a Sales tax code.
Delete the SALES TAX CODE and the amount will not show up on the the REport