Construction Draw

When you secure a construction loan, barring any initial advance, the starting liability is ZERO. Each draw as a bank deposit or transfer is an increase in the loan balance. Debit Banking, Credit Loan.

Then when you cut a check it is to expense or asset (Work In Progress), depending on what you are building. Generally, you want WIP so that once the job is complete you transfer the ending WIP asset to a full Fixed Asset for depreciation (which cannot start prior to job finish)

If the bank pays your subs directly from the draw (or counter checks go to them and no money passes into your checking) then you would want to ADD a cash clearing bank type account to record the movement of funds into WIP

Appreciate your help!

if I have 7 different construction loans should I make different liability accts for each?