Note receivable and pmt discrepancy

[equinecpa]

Partnership has some notes receivable on some real estate it sold. The bookkeeper has supplied me with the figures. One note had a balance of $3000 last year, mortgagee paid $1400 and says its paid. Note holder has waived the balance and called it paid.

My question: The bookkeeper has divided the interest and principal portion of the payment. Is this the correct way of allocating the payments for the year, allocating them to principal and interest as usual, and then writing off the balance as bad debt?

And lastly does the bad debt just get reported as bad debt on line 12 of the partnership return? It's a cash basis partnership.

Thanks

Carolyn