How should I report canceled debt between 2 entities with common shareholders? Do I write off on one

[MyGo2CPA]

I have a partnership that paid multiple bills for a S Corp over many years.  The payments were recorded on each company as a loan receivable and a loan payable respectively.  Members of the partnership and the S Corp shareholders are identical.  The partnership reports income on the accrual basis and the S Corp on the cash basis.  The S Corp has heavy losses that will offset the income, but is this the correct way to handle it?