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Need to create a loan account when I being the Director borrowed money from the business. How can I do that and what needs to be done?

 
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QuickBooks Team

Need to create a loan account when I being the Director borrowed money from the business. How can I do that and what needs to be done?

Hello savvient-

 

There are a few steps on how to create a loan account and record transactions for said account. You can read more here, Set up a loan in QuickBooks Online but see below on how to get started in setting up the account. 

 

Set up a liability account to record the loan:

  1. Select Settings  ⚙, then select Chart of Accounts.
  2. Select New to create a new account.
  3. From the Account Type ▼ drop-down menu, select Non-Current LiabilitiesNote: If you plan to pay off the loan by the end of the current financial year, select Other Current Liability instead.
  4. From the Detail Type ▼ dropdown, select Loan Payable.
  5. Give the account a relevant name, like "Loan for a car."
  6. Choose when you want to start tracking your finances. In the Balance field, enter the amount in the account, and determine the as of date. Enter today's date if you want to start tracking immediately.
  7. Enter the full loan amount as a negative amount in the Amount field. Since the future payments to the bank are a liability for your business, the amount should be negative.
  8. Select Save and close.

In regard to go about how to record this type of transaction I'd recommend you reach out to a QuickBooks Online Certified ProAdvisor for best practice to make sure everything is being recorded properly. 

 

Please reply here if you have any additional questions. 

 

-Christine

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Level 1

Need to create a loan account when I being the Director borrowed money from the business. How can I do that and what needs to be done?

Hi Christine,

 

It looks like what you explained is a loan from a director othe than a loan to a director. 

Our business has recently purchased a car that is 50% personal use by the director.  I was told to record,

(Dr Loan to Director,  Cr Motor vehicle contribution), which ends up an increase of income of $15,000 for March 2020.

How do I make accounting entries for the transactions please?

The car costs $30,000 and 50% business use. Recent tax law allows write-off of the car other than annual depreciation.

 

Kind regards,

Angela