Yes, I know all of this, but I am talking about the bookkeeping. It looks like there are 2 (or more) alternatives:
(1) When cash comes in, you take, say 10% of the Revenue, that is, If gross revenue is $100,000, so I will take $10,000 and allocate it to Principle in a separate cash account from the cash account for Income. You also deduct depreciation from the Fiduciary Accounting Income as well. I assume taxable income will deduct the balance as DNI.
or
(2) Do you just deduct the amount allocated to principal and not take the cash? Do you set up an account for the Principal, and add the Depreciation Reserve as income?
I find nothing in the references that addresses any where near about what I am asking.
