Computerized Farm Record Keeping with Quicken® 2003

Bulletin 908

CCC Loans

CCC Loans As Loans

If you treat the CCC loan as a loan, the procedure for recording the loan is shown in Example 15 in the Data Entry chapter. You will need to create a liability account such as [CCCLoan]. When you get the loan, the money is deposited into the checking account with the category for the entry being [CCCLoan]. This transaction increases the balance in the checking account by the amount of the loan and transfers the same amount as a liability into the loan account [CCCLoan].

When repaying the loan use the split screen to record the principal payment with the category entry (transfer) of [CCCLoan] and the interest and other expenses are charged to the respective expense categories.

In the case where the CCC loan is paid off for a lesser amount based on the Posted County Price (PCP), the amount of the debt forgiven (the marketing loan gain) needs to be recognized as additional income. Recognizing the marketing loan gain requires an extra line in recording the payoff a CCC loan.

A REPAYMENT EXAMPLE - A farmer takes out a CCC loan on 10,000 bushels of soybeans. The loan rate is $5.35 per bushel and the total amount of the loan is $53,500. Several months later the PCP for the grain is $4.90 and the farmer decides to redeem his beans by paying off the loan for $49,000. He now has a marketing loan gain of $4,500, the difference between the original loan amount and the amount paid to redeem the beans. The register entries in the FARM CHECKING account to pay off this loan at the PCP would be as follows:

Date	Num	Payee	Memo	Category	Amount	Balance
3/1/XX	101	County FSA		--SPLIT--	$49,000.00
		**Split Screen Detail**
	Category		Memo		Amount
	1. [CCCLoan]		Loan payoff		53,500.00
	2. govt payments		Marketing loan gain		-4,500.00

If the loan amount shown in the [CCCLoan] account was $53,500, the above entry in the FARM CHECKING register will zero out [CCCLoan] and will recognize the marketing loan gain of $4,500. When CCC loans are repaid using the PCP and the PCP is less than the loan rate, the interest accrued on the loan is forgiven and not considered to be income.

ANOTHER REPAYMENT EXAMPLE - A farmer takes out a CCC loan on 10,000 bushels of soybeans for $53,500. Some time later he locks in the PCP of $4.90 to repay his loan and at the same time contracts his beans for delivery at $5.00. He delivers the beans to the elevator and takes the check for $50,000 to FSA to repay his loan. FSA then issues a check to the farmer for $1,000, the difference between the loan payoff and the check from the sale of the soybeans. The register entries in the FARM CHECKING account to pay off this loan would be as follows:

Date	Num	Payee	Memo	Category	Amount	Balance
3/1/XX	DEP	County FSA		--SPLIT--	$1,000.00
		**Split Screen Detail**
	Category		Memo		Amount
	1. grain sold		10,000 bu @ $5.00		50,000.00
	2. [CCCLoan]		Loan payoff		-53,500.00
	3. govt payments		Marketing loan gain		4,500.00

**NOTE** If the soybeans had been sold to the elevator at the PCP of $4.90, the deposit amount would be $0 and the grain sold entry would be $49,000. The entries for [CCCLoan] and govt payment would be the same.

CCC Loans Treated As Income

If you treat the CCC loan as income, the loan is income in the year received. You must set up an asset account and record the amount of the loan. When the loan is redeemed (or forfeited), you offset the asset account, and report the difference between the sale (or forfeiture) of the grain and the basis from the asset account as additional gain or loss. Interest paid and any other associated expenses are charged to the appropriate categories.

Accounts & Categories Needed

An income category and an expense category and two accounts are needed to properly report CCC loans that are reported as income. The categories are included in the Category & Transfer list of the Farm&Home.QIF file in the Categories and Classes chapter.

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