Payment of Sales Invoice against a loan account

Question

Hello,&nbsp;We have an Asset account (Account Type: Other Asset) to record the money we have loaned to our parent company.&nbsp;We also have some Sales Invoices to our parent company - but they won't pay them.&nbsp; Instead, they want us to reduce the loan account according as a way of paying these Sale Invoices.&nbsp;How do I do this?&nbsp;Thanks in advance.

mike_james · Accepted Answer

Hi&nbsp;charliez&nbsp;, that's correct, and it increases the loan account, I was slightly confused in that I took from your first post that head office expected it to reduce.

mike_james · Answer

Hi charliez&nbsp;, the sales invoices are debtors, so both them and the loan account are assets and can't be offset. I suggest you point this out.

charliez · Answer

Yes, you're right; I was confused in my original post.&nbsp; But it looks like we got the right outcome after all.&nbsp; Thanks.

charliez · Answer

OK... so here's what I've done.&nbsp;I've changed the Asset Type of the loan account from "Other Asset" to "Bank".I then recorded a payment for the outstanding sale invoices, using this loan account as the "Deposit to Account" ... effectively increasing the loan to the parent company.&nbsp;&nbsp;Seems to work OK.&nbsp; Is there anything I should be aware of?

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Payment of Sales Invoice against a loan account

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