Archived
05-03-2008, 07:53 PM
When I sealed my grain, I set up the account as a liability, just as I set up my operating loans. However, when I buy it back at a lower price than sealing, it will show that I still owe them xxx amount of dollars after I enter in the buy back amount. The extra it shows that I still owe would be my market gain. How do I show that as "income" and properly close out the loan?
Is there a better way to handle a "loan" such as this when you may have a market gain? Thanks!
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> When I sealed my grain, I set up the account as a liability, just as I set up my operating loans.
I recommend you always do it this way; that is, always set up the CCC loan just like any other loan. This will help keep your records correct, and will prevent omitting the CCC loan when preparing a Balance Sheet.
Exception: if you're one of those folks who treats CCC loans as taxable income at the time the loan proceeds are received, then you of course wouldn't record the proceeds as a loan but as income--as if the loan proceeds represented a "sale" of the grain.
> ....when I buy it back at a lower price than sealing, it will show that I still owe them xxx amount of dollars after I enter in the buy back amount. The extra it shows that I still owe would be my market gain. How do I show that as "income" and properly close out the loan?
Use a Registry entry in QuickBooks, which does the following:
(1) Debit (DR) your CCC Loan account for the dollar amount that remains after buying back the crop for less than the loan rate.
(2) Credit (CR) an income account for the same dollar amount.
This will clear the CCC loan balance, and record the loan gain income.
I say "an" income account in step (2), because the choice of what account to use is up to you. I recommend using an account which lets you get a total for CCC loan-related income, separate from regular crop income, so you can reconcile this total easily with the paperwork (1099s) you get from Commodity Credit Corporation at year's end.
You could do this with a separate "CCC Loan Gain Income" account, or create subaccount(s) for the crop(s) involved. If the crop is soybeans, for instance, and you want to include loan gain income in soybean gross income, that part of your chart of accounts might look like this:
Income
Soybeans
CCC Loan Gain Income
> Is there a better way to handle a "loan" such as this when you may have a market gain?
No, you're on the right track.
If any of this is unclear, reply here and someone will try to help.
Mark Wilsdorf
Flagship Technologies, Inc.
QuickBooks™ Add-Ons and Solutions You Can Use
http://www.goflagship.com
Is there a better way to handle a "loan" such as this when you may have a market gain? Thanks!
==========
> When I sealed my grain, I set up the account as a liability, just as I set up my operating loans.
I recommend you always do it this way; that is, always set up the CCC loan just like any other loan. This will help keep your records correct, and will prevent omitting the CCC loan when preparing a Balance Sheet.
Exception: if you're one of those folks who treats CCC loans as taxable income at the time the loan proceeds are received, then you of course wouldn't record the proceeds as a loan but as income--as if the loan proceeds represented a "sale" of the grain.
> ....when I buy it back at a lower price than sealing, it will show that I still owe them xxx amount of dollars after I enter in the buy back amount. The extra it shows that I still owe would be my market gain. How do I show that as "income" and properly close out the loan?
Use a Registry entry in QuickBooks, which does the following:
(1) Debit (DR) your CCC Loan account for the dollar amount that remains after buying back the crop for less than the loan rate.
(2) Credit (CR) an income account for the same dollar amount.
This will clear the CCC loan balance, and record the loan gain income.
I say "an" income account in step (2), because the choice of what account to use is up to you. I recommend using an account which lets you get a total for CCC loan-related income, separate from regular crop income, so you can reconcile this total easily with the paperwork (1099s) you get from Commodity Credit Corporation at year's end.
You could do this with a separate "CCC Loan Gain Income" account, or create subaccount(s) for the crop(s) involved. If the crop is soybeans, for instance, and you want to include loan gain income in soybean gross income, that part of your chart of accounts might look like this:
Income
Soybeans
CCC Loan Gain Income
> Is there a better way to handle a "loan" such as this when you may have a market gain?
No, you're on the right track.
If any of this is unclear, reply here and someone will try to help.
Mark Wilsdorf
Flagship Technologies, Inc.
QuickBooks™ Add-Ons and Solutions You Can Use
http://www.goflagship.com