Hi,

We just took out a Merchant Cash Advance in the amount of $15,000 and now the total we must repay is $22,184.  For those who aren't familiar with this in the restaurant business they just take 10% of your debited sales each day as a repayment.  The daily repayment amounts are then subtracted from the total of $22,184.  There is not set interest payment and no time limit on the loan to be repaid.

My question is how do I record the initial advance it loan?  I'm not sure how to record the interest of $7,184 up front.

Dr.  Cash $15,000

  Cr.       Advance it Loan (Liability Acct?)         $22,184

Then at the end of each month would you recommend an entry such as this?

Dr.  Advance it Loan       xxxx

   Cr.       Cash                             xxxx

Any suggestions would be helpful.

Thank you