I followed airKevin's instructions and added one additional step: It still appears as income even though the account is labeled "non taxable PPP forgiveness income".
To correct that I made another journal entry and debited the forgiveness income account for the amount of forgiveness and then credited "additional paid in capital" account the same amount. This is an equity account and it adds the money to equity of the company (balance sheet) without affecting the income statement.
If someone can confirm this is correct, that would be great
