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November 12, 2018
Question

Loan origination fees

  • November 12, 2018
  • 1 reply
  • 25 views

I have a loan origination fee that was taken upfront from my unsecured loan proceeds.  How is this recorded?

1 reply

Regina_Lend_A_Hand_Accounting
Level 2
November 12, 2018

It is a deductible expense that can be included in your loan interest expense. You can create a sub-account to loan interest if you want to track it separately, or you can just expense it to loan interest.

tmarkjAuthor
November 12, 2018

Thanks, yes to the loan interest account, but what would be the offsetting account?  Debit/Credit

Regina_Lend_A_Hand_Accounting
Level 2
November 12, 2018

That depends on what bank the fee was paid with. If the fee was paid via a connected business checking account, then the expense will come through the bank feed and you can simply expense the charge when it comes through. If your loan payments are not coming out of a connected bank account, but rather a personal account that is not connected, then this expense would be a draw against Equity and a journal entry would need to be made.