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Level 1

How do I categorize a car loan payment?

 
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Level 6

How do I categorize a car loan payment?

Hey lydia8,

 

Recording loans and their payments is a regular and important part of any business' bookkeeping. Depending on your particular situation, the specific way of recording these might vary. Thankfully, QuickBooks Online is built to simplify your accounting and help you take control of your books. I'll gladly help you get this set up. 

 

Recording a loan payment is just a few easy steps:

  1. Select New then click Cheque
  2. Add a cheque number if you send an actual cheque. If you use direct withdrawal of EFT, enter Debit or EF in the Cheque # field.
  3. Enter the following information in the Category Details section.
    • First line: Liability account for the loan and the amount of payment.
    • Second Line: Expense account for the interest and the amount.
    • Additional lines: Any additional fees along with the appropriate accounts.
  4.  Select Save and close.

It's critical to set the loan liability account up properly, for additional details check out this awesome article: Set up a loan in QuickBooks Online

 

Let me know how it goes!