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Saddle1
February 18, 2023
Question

Construction Loans

  • February 18, 2023
  • 1 reply
  • 0 views

Hello-

 

New construction home builder. When I start my 12 month construction loans I am not sure how to categorize the income from the bank.

 

Example-

 

I call the bank and make a draw to pay my subs, and then they deposit it to my account. What account do I apply the money received so it’s not considered “income” and what account do I apply the bills from the subs that did the work on that construction loan? Thanks in advance 

1 reply

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docsbp29
February 28, 2023

Apply the deposit from the bank to a loan account such as Note payable ABC Bank which should be set up as a liability account. Add payments to subs as you normally would. Usually an expense account such as subcontractor, or carpenter, painting, plumbing etc

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