CenterPoint® Fund Accounting - Move Current Portion of Long Term Debt

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Adjust Current Portion Long-term Debt Video - Duration: 11 min 04 sec

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There may be times when your accountant or lender may ask you to move the current year's principal on a long term note to a current liability account. This can easily be done in CenterPoint Accounting.

You will use adjusting current portion long term debt transactions to transfer the current year's principal portion of the long term debts to the current liability section of the Balance Sheet. The long term section of the Balance Sheet decreases, and the current section of the Balance Sheet increases. Long term equipment and long term liabilities include a tool to calculate the loan's payment schedule. The payment schedule breaks down principal and interest for the life of the loan. The current portion of the long term liability equals the principal payments for the next twelve months of the long term loan. The adjustment of the current portion of the long term debt transaction uses the payment schedule to determine what the current portion of the long term debt dollar amount is.

Once a year, this adjustment moves the next year's current portion of the long term liability into its current portion long term debt liability. The month of the original long term loan date defines the month that the adjustment is made to transfer the current portion of the long term debt to the Balance Sheet.

Step A - Assign Details to the Loan Account (one-time setup)

Step B - Move the Current Year Principal to a Current Liability Account

Step A - Assign Details to the Loan Account (one-time setup)

  1. Select Setup > Accounts > Accounts.
  2. Select the appropriate loan account and click Edit.
  3. Click on the Detail tab.

  1. Specify the appropriate Current Portion Long-term Liability account.
  2. The Company/Fund Specific Detail Information must also be completed for this loan. Specify the appropriate Interest Type, Payments Per Year, Interest Rate, Loan Origination and Completion Date.
  3. Click on the Schedule of Payments button. The payment schedule uses the loan details for each company/fund and the original balance of the loan to calculate the amount of the principal and interest portion of the payments. If a transaction was used to enter the original balance of the loan, that amount will display. If you want to calculate a payment schedule for a long term loan that does not have an original balance, enter it at the top of the Payment Schedule screen.
  4. The Calculate Payment Schedule screen will be displayed. Enter the Original Balance. This is the principal amount borrowed from the lender.
  5. Click Calculate. The system will calculate payment amounts (including Principal and Interest), Current Portion Balance, Long Term Balance and Total Balance.

  6. Click Save on the Payments Schedule screen and Save on the Account screen.

Step B - Move the Current Year Principal to a Current Liability Account

  1. Select Processes > Periodic > Adjust Current Portion Long Term Debt.
  2. Click Create New.

  1. In the Company/Fund box, enter the company/fund name that the current portion long term debt transactions should be created for.
  2. In the Transaction Date box, the next "calculated" date to create current portion long term debt transactions displays. The date is calculated by taking the last date transactions were created and incrementing the date one month.
  3. In the Transaction Number box, enter the transaction number for the current portion long term debt transactions or click the sequence number icon and select the next available sequence number. See the Maintaining Sequence NumbersMaintaining Sequence Numbers topic for more information.
  4. In the Memo Line 1 box, enter an optional memo for the transaction. In the Line 2 box, if the transaction is assigned a name that was setup with a default memo, it will display automatically and can be overridden.
  5. Enter an optional Notation.
  6. Click OK.
  7. Click Post.
  8. From the List tab, you can perform the following actions on a posted transaction:

  • Review posted transactions: Select the posted transaction and click Review.
  • Reverse and recalculate a posted transaction: Select the posted transaction, click Recalculate, select the Reverse and Recalculate option, and then click OK to immediately reverse and recalculate the current entry. When the recalculated entry displays, click Post to finalize the recalculated entry (if you click Cancel, the system has already reversed the previous entry). The current portion long-term debt transaction recalculates using the same date, company/fund, transaction number, and notation.
  • Reverse posted transactions: Select the posted transactions, click Delete, and then click Yes. All current portion long-term debt transaction for the company and date will be reversed.
  • Add current long term debt transactions for loans not previously calculated: Select the posted transactions, click Recalculate, select the Add current portion LT debt transactions option, click OK, and then click Post.
Note: When a payment is subsequently made on this account, it should be made to the original loan account when specifying the principal amount being paid, not the current portion account.

 

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