Problem: We've issued the loan to Company 1 but it was Returned by another company (Company 2) on behalf of Company 1. How to reflect such an entry in the system?
Solution: The case cannot be performed by single entry and it should be adjusted by means of a Mutual Settlement document. Initially, the loan was recorded using Bank payment with transaction type, Loan issued to the debtor, the GL will be automatically picked up as the Current loan issued, do check the GL before the reversal to make a sure the right account is used in the entries.
1. Enter Mutual Settlement with Transaction Type Customer Debt Assignment. In the Customer field put Company 1 (the loan has been issued to), In the Customer Recipient field put Company 2 (the loan has been returned from):
In Accounts Receivable, select the Loan Document (Bank Payment):
In Payee Attributes, select the Contract if Company 2. put the Amount and specify the corresponding GL accounts:
Mutual Settlement will CR Current Loan Issued (or another account that was specified in Loan document) and DR the Account that you selected in Payee Attributes tab for Accounts Receivable:
2. Create Bank Receipt (from Customer) from Company 2, in Cash Flow items you can specify those item that you use for Loans:
In Payment Details Select previously entered Mutual Settlement:
Bank Receipt will Dr Bank Accounts and Cr GL account that was specified in Mutual Settlement:
Accounts of both companies will be adjusted:
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