cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Experienced Member

Declining balance

Is there a way to do the following:

We have different loans for different homes from the same lender, is there a way to put in the loan amount for each separate home and then as invoices come in and are paid it will take away from the balance of the loan, so we will have an up to date loan balance on each separate home

1 Comment
Established Community Backer ***

Re: Declining balance

Yes, there is an easy way to set it up.  Pending how you've been showing the payments may or may not make it a longer process just to clean things up.  (And it doesn't matter they're all from the same lender, think of them as separate loans - someday there may be a mix of lenders.)

 

Since they are existing loans, I'm assuming (hoping) all of the currently loans are in one Long Term Liability or Other Currently Liability.  If not, get back to us on how you do have these loans set up in your QBs.

 

But if everything is under one account, to separate out each of the loans we're going to create a Sub Account for each of them.  Go into your Chart of Accounts and create a New Long Term or Other Current Liability account - make it the SAME TYPE as the Liability Acct you currently have the loans in now.

 

As you create each on, I would name them for the property (abbrv if nec.) and then add the loan account#, this will make it easy to distinguish when looking at reports or trying to catch an incorrect entry.  

 

Right after naming the account you will see a Check Box to make this new acct a Sub Account, pick the account that has all of the loans in it now.   (Note:  If the main account is just called "Long Term Liability" or something like that, I'd rename it to something more specific like "Property Loans" or whatever makes sense.  Someday you may have another "Long Term Liability")

 

I'll also assume you have an Expense account to track the Interest paid on the loans.  Your choice if you want to break out each one or if you just want to put the interest in one account.  If you choose multiple, you can rename the existing account to "Interest Expense" and then create a sub account for each.  For the Subs I'd name them again with the loan account# (e.g.  123456 Interest).

 

If you have not been breaking out the Interest payments, you need to.  So again in Chart of Account create a New account.  This time the type will be Expense and you can create the one or with the Subs.

 

Okay, now we need to get the loan money into each of these accounts.  If my assumptions have been correct and everything was in one Liability Acct, then we just need to move the entries from the Parent Acct to the Subs.  Not knowing how many loans or how long you've had them, I'm not sure how many entries there are.  My preference for clean reports would be to edit each entry and move it to the correct Sub Acct.  This would be from the initial deposit in the bank from the lender through every payment.

 

If that's not feasible due to the volume, then you can make Journal entries to move the amounts through 12/31/18.  Then correct the 2019 payments and continue on.

 

So now when you make a payment you'll split the check between the Principal Payment for specific loan you're paying and the Interest Payment to either the general Interest Expense Acct or the specific Interest Expense: 12345456 Interest.  You'll see the balance due on each of the loan accounts go down and the interest will be in the expense account.

 

Let us know if that helped or how  your accounts are set up so we can narrow in on what you need.