Barter/Loan

[geekgirldany]

I have a client that got start up money loaned to him from an investor. Client is S-Corporation. The payments on the loan were suppose to start in 2012. The S-Corporation (shareholder) and the investor came to an agreement that the loan amount would be lowered by work the shareholder would do for them. He did approximately $8,000 worth of work for the investor in 2012.

I understand that this will lower the liability account but what is the other account that should be coded? Income account?

I would appreciate any help on this. I am having a hard time this year with my health and sometimes I am not thinking to clearly.

Thank you
D

[JohnH]

Yes, it is income. No different that the situation would be if he deposited and $8,0000 check form the lender to his bank account and then wrote an $8,000 check back to the lender for the loan payment.