In the accounts for a trust, an initial sum is typically donated by a trustee to start up the trust. Thereafter additional funds may be loaned to the trust and accounted for via a loan account. There is a legal provision to donate a certain amount per year tax-free. I would like to do this by writing off a portion of the loan account annually. How does one account for this ? I assumed that I should do a journal entry to debit the loan account and credit the capital account, but this does not seem to work, the transaction ends up in the suspense account.
When you credit capital account, you also need to select beneficiary and relevant sub-account of beneficiary.
If you don’t want to use
Funds contributed sub-account, you can create new sub-accounts under