Hi Kelbel6 ,
Thanks for your post.
I would like to check if you're still having this issue?
In this type of scenario, we recommend reaching out to an accountant for an accurate solution. However, here's an idea on how to properly account for the loan repayments handled by the third-party sales supplier using a general journal entry:
- Credit the Loan Payable Account: This reduces your loan liability.
- Debit the Refunds or Sales Returns Account: This recognizes the reduction in sales due to the refunds provided by your partner.
The entries would look something like this:
- Credit: Loan Payable Account (to reduce the loan balance)
- Debit: Sales Returns and Allowances Account (or a similar account used for recording refunds and returns)
The Sales Returns and Allowances account is typically used to track the reduction in sales due to refunds and returns, which aligns with the nature of the transaction you're describing. This way, your financial records will accurately reflect the reduction in the loan liability and the corresponding reduction in sales due to refunds.
Here’s an example journal entry:
| Date |
Account |
Debit |
Credit |
| [Date] |
Sales Returns and Allowances |
$X |
|
| |
Loan Payable |
|
$X |
Replace [Date] with the actual date of the transaction and $X with the amount of the loan repayment associated with the refund.
Feel free to post again, we're happy to help!
Regards,
Earl
