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Need Guidance: How to Post Draw Payments
Quick question. I'm trying to clean up the transaction records from my first flip. I understand (mostly) double-entry accounting concepts, and I have most of my transactions recorded (just using Google Sheets for now) with a debit account and a credit account. I understand about 95% of what's going on, but I do have a problem I need help with.
How do I account for draw payments received? If my loan was such that each draw payment increased the loan amount, I'd know what to do with each payment (debit cash, credit loans payable). But my draw payments come from a construction holdback that was created at closing; i.e., I'm paying interest on the entire loan from day 1 (yeah, I know - first and last time I'll make that mistake). So I'm debiting cash, but I can't figure out what to credit to balance the transaction.
Thanks in advance for your input.