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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16544
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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There was a loan taken from an Escrow account for a non profit

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There was a loan taken from an Escrow account for a non profit that was designated for a construction plan. The monies were taken out and booked to another account. I need to set up a loan from Escrow as a liability, do I debit the escrow account and make it whole for the loan amount. So I debit escrow and credit loan to Operating?

MyVirtualCPA :

Yes, your accounting on this transaction sounds correct

MyVirtualCPA :

You would debit escrow and credit the loan to operating in order to account for the loan from escrow

MyVirtualCPA :

Is there anything else you need assistance with today? If not, please rate as "excellent" so that I may receive credit for assisting you today

Customer:

So the monies would be like a deposit in transit on the escrow account?

MyVirtualCPA :

They would not be a deposit in transit

Customer:

So now the escrow account is whole, but the loan money is not there. When you do a bank rec what would you consider it as for we are putting it back in the escrow.....

MyVirtualCPA :

Oh, then it would be in transit

MyVirtualCPA :

I misunderstood. Sorry

Customer:

S when the money is paid back you just debit the loan account, you would not hit the escrow for it is already tie out......you would credit operating.

MyVirtualCPA :

Correct

MyVirtualCPA :

Is there anything else I can assist you with tonight?

Customer:

Nothing at the moment.......Thanks so much

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