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Experienced Member

Loan Payment

How to fix loan payment error . Never accounted for interest against loan payment . Took principal amount and interest amount and applied to loan payment. How do I fix this in QB?  Thank You

4 Comments
QuickBooks Team

Re: Loan Payment

Hi, hk16.

 

If you’re setup to loan manager, the system will help you calculate the payment including the compounded interest and principal installments. This calculation is based on the information you’ve enter when setting up loan manager:
• Loan Date
• Loan amount
• Term
• Due Date of Next payment
• Payment Amount
• Interest rate


Reviewing your loan information and editing these loan details (if necessary) would be the first thing to do. If everything was set up correctly but still having error while processing the loan payment, I’d recommend running the Verify Rebuild Utility. This makes the program self-identifies the most commonly known data issues then self-resolves these issues afterwards.


Visit us again if you have other questions about QuickBooks. 
 

Established Community Backer ***

Re: Loan Payment

@hk16 

 

If this happened over more than this fiscal year, that could be an issue. Interest paid is an expense, so the interest you should have paid last fiscal year would reduce taxable net income - might be worth doing an amended return to get some refund back.

At any rate, assuming the loan did extend into previous years

from the loan company find the end of year balance for each of those years, and the current loan balance

In take the loan balance for the end date of the year being worked on, subtract it from the loan company balance for that same end of year date. Then do a journal entry, back dated to the end of that year
debit interest expense, and credit loan liability

when you get to this year, of course you use the current date for the journal entry

 

 

@MikiD 

Did you accidentally answer the wrong question?

 

QuickBooks Team

Re: Loan Payment

My bad, Rustler.

 

Thanks for notifying me! I've updated my answer though. 

Established Community Backer ***

Re: Loan Payment


@MikiD wrote:

My bad, Rustler.

 

Thanks for notifying me! I've updated my answer though. 


Still does not address the OP question though, no problem, I did that