I need to set up a fixed asset (building) with a mortgage loan. The loan I have been paying for approximately 9 months but haven't been recording it back to the fixed asset account. Is there an easy way to fix that without having to delete all the mortgage checks wrote? Also, the mortgage is split between a bank loan and an owner finance. Would I need to set up 2 accounts for the building or separate one for building and one for the land? My accountant told me enter this and I am totally lost on how to make it come out correctly.
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Sending good vibes to you, brookew_01.
I'm here to help you with setting up an account fora mortgage loan in QuickBooks Desktop.
You can set up a mortgage account then enter the loan amount as an opening balance. After that, edit the checks you wrote to allocate them.
To set up a mortgage account:
- From the QuickBooks Lists menu, choose Chart of Accounts.
- Right-click anywhere and click New.
- Create a loan account.
- Click the Other Account Types drop-down and choose Long Term Liability, then click Continue.
- In the Name field, enter the name of the loan.
- Click the Enter Opening Balance button and in the Opening Balance field, enter the full (beginning) amount of the loan.
- In the as of field, enter the loan origination date.
- Click Save & New.
- Create an escrow account.
- From the Type drop-down list, choose Other Current Asset.
- Enter a name for the account (Escrow, for example), the Opening Balance amount (if there have been any prior payments), and the as of date.
- Click Save & New.
- Create an expense account.
- From the Type drop-down list, choose Expense.
- Enter a name for the account (Interest, for example).
- Click OK.
You can get detailed information in this article: https://quickbooks.intuit.com/community/Help-Articles/Set-up-a-mortgage/m-p/202617.
If you wish to affect the mortgage account and the asset account, you can do this through journal entry, however, the assistance of an accountant is a must.
You may find this article helpful: https://quickbooks.intuit.com/community/Help-Articles/Manually-track-loans/td-p/201281.
Hope I helped you get all straightened out today. Let me know if you have other questions about mortgage loan in QuickBooks Desktop. You can always count on me.
When you purchase property it is a Fixed Asset but you have to separate Land from Building and Improvements. Your basis in land can not be depreciated or cost recovered until you sell. Tax assessed values are a recognized way to separate land from building. You do this after all original charges - closing costs - are added to the asset.
And you actually have two loans, one with bank, one with seller. So you need to create two accounts
You should avoid entering a beginning balance for s loan but should instead post the money movement as it happened- example loan funds buy the building or pay for a remodel.
You do not have to delete the already recorded mortgage payment checks - just reassign the details to principal and interest according to the amortization schedule or bank statements.