LOC funds were deposited to checking account then used for the remodel. How do I code this?

We took out a LOC for a remodel on our business, deposited the LOC funds to the checking account in order to use checks. I created a loan for the withdrawal of the funds from the LOC when I deposited the funds into the bank account. When I write checks to pay for the remodel how do I code those? 

Answer

This is perfect: "I created a loan for the withdrawal of the funds from the LOC when I deposited the funds into the bank account."

This is now your money, so you "code" these no differently: "When I write checks to pay for the remodel how do I code those?"

This is your own Work In Progress as Other Current Asset: "for a remodel on our business,"


Once the remodel is done, the accrued costs are posted to Fixed Asset Improvement. Nothing you are paying for should post to the P&L and it is not Expense. It is Expenditure as "investing in this new building remodel." Work with your own CPA to learn the differences between Repairs Expense and Asset. This type of project turns what might be simple repairs into New Asset value. Example: one broken window gets Repaired. Replacing all the windows = Improvement to the Fixed Asset.




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