This is what they have been doing.... 1) Debit Cash bank, Credit...

This is what they have been doing....

1) Debit Cash bank, Credit deferred revenue

This is what most people would suggest they should have been doing....

2) Debit Cash bank, Credit FC loan.

Either way it's still a liability on the balance sheet. It's just whether it's recorded as deferred revenue liability or FC loan liability.

Note in option 2, once the customer accepts, then you would then move it out of FC loan and into deferred revenue liability (Debit FC Loan, Credit deferred revenue). Then you end up back in the same accounting position as option 1. The issue is they skipped out the initial step of declaring the loan, and booked it straight as deferred revenue.