How to record Interest paid by the CitiBank?

[Zee]

Search the internet

I'm sure a quick internet search can find a BBS for construction accountants. Intuit sells Quickbooks for Construction, right? Try doing a search yourself, it's easy.

[NPH]

NPH has been on the forum many times in the past. He is an in-house accountant/bookkeeper that does not trust the company's CPA. So he asks questions here occasionally.

Some on the board do answer him and some don't.

DEBIT> CONSTRUCTION INVENTORY
CREDIT> LOAN PAYABLE

Actually I like this board.

Thanks, I just figure out today.

Debit: Construction in Progress
Credit: Loan Payable.

Can someone tell me where I can find a message board for financial accounting?

I asked this a few times.

[BOB W]

NPH has been on the forum many times in the past. He is an in-house accountant/bookkeeper that does not trust the company's CPA. So he asks questions here occasionally.

Some on the board do answer him and some don't.

DEBIT> CONSTRUCTION INVENTORY
CREDIT> LOAN PAYABLE

[Snaggletooth]

Construction environment

We are a real estate developer. We have a construction project. We have $2 million construction loan from the CitiBank. CitiBank paid $65,000 Interest to CitiBank for our construction loan in 2007.

NPH, since this is a forum for tax preparers, many of us on this board (including myself) are no longer spending time answering questions when your best course of action would be to seek out someone who has training in taxes and/or accounting.

I would not have taken the time to answer except that I've noticed you have 46 posts, and all your questions are quite earnest, although quite evident your training is simply not there. I perceive that you are working in a construction office and are perhaps thrust into an environment where you are confronted with accounting situations involving large amounts of money.

The questions you ask in your posts, and the amounts of money involved, are all the better reason to seek help, because if this company is moving headlong into some of these transactions they can fall into tax traps, and benefit from tax planning that a CPA or EA can bring to you.

If you are in a position that creates a need for this type of training, you can learn a great deal from such a tax person, and if you feel the need to learn more, you can order The Tax Book. If you have this desire to become more qualified in your job, we certainly wish you well, but your local tax practitioner can bring more to your table than we can. We cannot effectively give you bits and pieces from this board to meet your specific situation, and as a group we are taking a position against giving out free and often dangerous responses in a situation like this.

Not the answer you wanted, but we do wish you well and hope you will take our advice.

[thomtax]

CitiBank paid $65,000 Interest to CitiBank for our construction loan in 2007.There is no effect to our cash account.

Did they actually pay themselves $65,000 or did they renew the note and add the $65,000 to the amount of the loan that you owe?

[erchess]

Read OP

Since this is a construction loan, you must capitalize the interest.
If it doesn't affect a cash account, how did you pay for it? Nutter Butter Bars?

OP states clearly that Citibank paid interest on the loan to itself. We are dealing with a less than stellar knowledge of such things as English, GAAP, and Banking Practices or we are dealing with a hoax.

[Y2KEA]

Since this is a construction loan, you must capitalize the interest.
If it doesn't affect a cash account, how did you pay for it? Nutter Butter Bars?

[erchess]

This has to be a joke

We are all used to freeloading individuals, but now a freeloading business? Come on whoever is pulling our legs, come clean. Or did someone who was banned manage to sneak back on and post this???

[NPH]

We are a real estate developer. We have a construction project. We have $2 million construction loan from the CitiBank. CitiBank paid $65,000 Interest to CitiBank for our construction loan in 2007.There is no effect to our cash account.

How can we record the interest?

Debit
Interest Expenses

Credit
??