FAQ 837: DV--Loans: How to post accrued interest on a loan we are going to default?

Problem:

How do I enter accrued interest on a loan we are going to default?


Solution:

Increase the deemed distribution amount on the type 29-Loan Payoff to include the accrued interest. Next (if you have already added the accrued interest as a transaction type 8) change it to a transaction type 28 or just enter the accrued interest as a type 28 Loan Transfer In. All of the math will flow as expected. Then to further explain the accrued interest it is recommended that after posting the Type 28 transaction and printing to a pdf report that you edit the individual's statement in Adobe and change the detail line from "New loan" to "Accrued interest".