We teach students how to fly airplanes and also repair and maintain airplanes. Someone loaned us $10,000 to make a down payment on a plane. They then went and bought a plane and we pay the loan back by doing repairs on their airplane. The loan is a note payable but I am not sure how to post the "payments."

Note Payable loan from Mr. A $10,000

Labor for repairs 1/8/15 -$480
Labor for repairs 3/10/15 -$1400
Labor for repairs 8/25/15 -$2600

I just need help in how to post the payment transactions. Thank you.

Wait, I'm totally confused. Why did you borrow 10K so that they could buy a plane? AND do repairs in trade? Who owes or paid for the rest of the plane cost? Who actually owns it? You keep saying it's theirs.

How does this transaction differ from any other repayment you might make? If a creditor for $10,000 exists in your books then the transactions would reduce that balance, however the bigger question is where does the full capital value of the plane reside; in their books or yours. Are you acquiring an asset or repaying a loan?

(Hi, please copy what you wrote to me and paste it here so others can answer publicly.)