Let me guide you on how you can set up the forgiveness account and enter it into that account, DanOakHill.
We have few options on how to record the funds received from the Paycheck Protection Program (PPP) Loan and the expenses to which the funds are used. To set up the forgiveness account, follow the steps provided below:
- In the Chart of Accounts, select Account ▼, and then New.
- Select Bank, click Continue.
- Enter a name for the account, like “PPP Loan Funds”
- Click Sub-account of and choose the bank account from the drop-down
- Click Save and Close.
Then, create a new loan account in the Chart of Accounts. Here's how:
- In the Chart of Accounts, select Account ▼, then select New.
- Select Other Account Types, then select Long Term Liability.
- Click Continue.
- Enter a name for the account, like “PPP Loan”.
- Click Save and Close.
Next, record the loan proceeds received. You can follow the steps below:
- Select Banking, then select Make Deposit.
- Change the Deposit To account to the new bank sub-account.
- In the From Account column, choose the loan account created.
- Enter the amount received in the Amount column.
- Click Save and Close.
Read this article for more information: Paycheck Protection Program Loan Forgiveness. However, if you're still unsure of how to do the recording and may have some questions with PPP, I suggest reaching out to your accountant or legal professional. Also, regulations and guidance from the SBA and the U.S. Department of the Treasury on the PPP are evolving rapidly. You'll want to refer to the latest guidance from SBA and Treasury to confirm current program rules.
In addition, I've also added this article so you can keep track of how you use the funds you get from your PPP loan: Track How You Use Your PPP Loan.
Reach out to us if you have any concerns about your loan forgiveness. We'll always be right here to help you.
