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Established Member

How do I enter loan fees which are added to a loan amount but not deposited?

 
3 Comments
Established Community Backer ***

Re: How do I enter loan fees which are added to a loan amount but not deposited?

Let's say you borrow 1,000, and the fee is 25

 

 use make deposits

line one, liability account, 1,025

line two, fee expense, -25

 

or

journal entry

fee expense, 25 (debit)

bank deposit, 1,000 (debit)

loan current liability account 1,025 (credit)

Established Member

Re: How do I enter loan fees which are added to a loan amount but not deposited?

Thanks Rustler,

 

Could you tell me how to enter the fee expense as an expense for tax purposes without it affecting bank account balances? I tried to enter it as an expense to an undeposited funds account which I created as a Current Asset account but got an error message when I tried to save it.

Established Community Backer ***

Re: How do I enter loan fees which are added to a loan amount but not deposited?

My entries posted it to an expense account

sorry I can not help with your VAT tax system, I am in Texas