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A loan comes in
Someone lends the society money: agreement first, board decision next, money owed from the first dollar.
In the books, the Wizard walks this task beside you and ticks each step from the books as it lands.
Write the loan agreement
Before any money moves, the loan stands on paper. It says who lends and how much. It says if interest is charged, and at what rate. It says when the money is paid back, and what happens if the society cannot pay. Both sides sign it.
The paper is kept with the society’s records. A loan with no paper is a story the next treasurer cannot check.
(Done on the by hand page.)
The lender declares their interest
A lender who is a director has an interest in this choice. The Act is plain about what comes next. They state the interest out loud. They take no part in the talk. They do not vote.
The rule stands at sections 56 and 57 of the BC Societies Act, and the Declare an interest page in Legal gives it in full. The next step writes the statement into the board’s record.
(Done on the Governance page.)
The board decides to borrow
Borrowing is the board’s decision, taken under the society’s bylaws. Record the resolution on the Governance page. It says the society borrows, from whom and how much, on the agreement’s terms. The lender’s declaration stands in the same record.
A resolution that names the loan ticks this step from the books. Tick it by hand if the board’s record stands elsewhere.
(Done on the Governance page.)
Record the loan in the books
When the money lands in the bank, record it at the Journal. Debit the bank account. Credit the loan account — loan payable to a related party — for the full sum. From that entry the loan stands as money the society owes on its statements, from the first dollar.
It is not income. Nothing was earned, and nothing was given.
(Done on the Journal page.)
Record the loan’s terms at the start gate
The start gate keeps one question over every loan: its terms as they stand, in the operator’s own words. Record them there — they are what the gate reads, and what a later treasurer finds first. A loan recorded at setup carries its terms from the setup step.
Tick by hand if the terms stand recorded in another way the board accepts.
(Done on the Start gate page.)
Pay the loan back
Each payment back is recorded at the Journal the same way, in reverse. Debit the loan account. Credit the bank, for the sum paid. Interest the agreement charges is a cost of its own kind, recorded with the payment. The loan’s balance on the statements falls with each payment.
It stands at zero when the last one lands.
(Done on the Journal page.)