I'm trying to help a friend with his accounts, and he's done something that I just don't know how to record.
He has a few properties on Airbnb. He set up a LLC to manage those properties, and recorded all income and expenses etc. for the Airbnb business. Now in one of the houses he had to buy a new furnace, he got a loan (in his name) and recorded it as a loan in the business and then any loan repayments made from the business.
Now he has decided to take that property off Airbnb to live in it. He has taken responsibility for repaying the loan and considers the debt his responsibility now, not the LLCs.
Unfortunately, neither he nor I know how to record that shift of debt and repayments to him. There was 9 months of repayments made by the LLC before he took over the debt. The LLC never had a property asset recorded (it doesn't own the property, it just managed the airbnb business expenses etc.)
I am thinking that the loan should never have been recorded in the business accounts, and that the repayments onto that loan should have been recorded as payments to the owner, however the 9 months of loan payments were made directly to the lender from the LLC's bank.
Am I overthinking this? Or is there a simple, straightforward, normal way to record this kind of transaction? Or has he made a complex financial problem he's going to have to overcome?
Thanks
