Thank you for taking the time to post today, Linda!
Yes, the reserved money is more likely to be tracked with a liability account. However, I cannot confirm that, so I suggest seeking advice from an accounting professional to ensure your books are correct.
About using up the reserved money, you can record a journal entry, and yes, debit the liability account and credit your income account. It's also a good idea to monitor the liability account balance in the Chart of Accounts as you create transactions.
Speaking of loans, I want to include this article with steps for tracking company loans (your company) for your future reference: Manually track loans in QuickBooks Desktop.
I'm just right here to continue helping you. Take care and have a good one!
