Trust loan provision accounting
We have a family trust where a loan was made to beneficiaries. It needs to be accounted as a loan rather than a distribution as repayments are being made with interest.
We are using Reckon One and the loan has been recorded as a current asset and when repayments are made the loan current asset account is being reduced. Interest is being recorded correctly as income.
The repayment amounts (principle) become income that can be distributed at end of year. Since the repayments aren't being recorded as income, the profit and loss is being skewed as it looks like there is a loss usually of the amount that has been received for loan repayments.
Is there a way to associate money in bank transactions to an account in a way that both reduces the loan amount but also increases the distributable income? If 2 journal entries are made to reduce the current asset and increase the income it looks like the trust bank account has received more than it actually has.
Seems like reckon one doesn't have the account structure to handle this situation unless there is something I have missed
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