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Here's how:In the Chart of Accounts, select Account 25bc, 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.
The PPP loan should be presented on the company's balance sheet and after it is forgiven, it will need to be recognized outside of operations as other income or as a gain on loan forgiveness.
Desktop how to record the PPP Loan ForgivenessClick Accounting.Go to the Chart of Accounts tab, then click New.Under Account Type, select Other Income.Under Detail Type, select Other Miscellaneous Income.Enter the desired name in the Name field.Click Save and Close.
Because PPP loan forgiveness is dependent on meeting certain conditions, it would be considered a conditional contribution. Conditional contributions are recognized as income when the conditions on which they depend are met. Under this approach, the cash inflow from the PPP loan is recorded as a refundable advance.
While it is excluded from taxpayers' gross income, tax-exempt income resulting from PPP loan forgiveness nonetheless must be included in gross receipts for certain other purposes, which include the gross receipts test under Sec.