Personal mortgage for a business.

AliQuint · ‎September 28, 2020

Hello,

I am not an accountant and I need help with this issue.

I got a second mortgage on my home in order to support my small business.

I pay as interest-only about $2,000/ month.

the loan is about 250 k. 100 are related to the business and 150k are related to my personal need.

so, b percentage is for business and p percentage is for personal needs. this applies for both the 250k and the 2k/month.

At the beginning of every month, I record a direct deposit from my business account to the loaner.

what do I need to do in order to make the records on my QuickBooks reflect only the business loan and not the personal loan?

Many thanks,

Ali

AliQuint · ‎September 28, 2020

Hi lashedlifter,

I have under "other assets" an account named "Loan to Shareholder" would that qualify?

or would I open an "Equity Stake Account" to register the mortgage on my personal loan (under "other assets")

Thanks,

Ali

View solution in original post

LeithG · ‎September 29, 2020

Hi AliQunit:

If you were to record it under your Loan to Shareholders account, that account would likely show the reverse amount of what you'd expect. What you may wish to do is create a section of accounts under Owner's Equity on your balance sheet including your Loan to Shareholders, and also your Shareholders Loan to Business.

View solution in original post

LeithG · ‎September 28, 2020

Hi AliQunit:

As this is a mortgage on your personal home, to fund your business, I would record it as your equity stake in the business (the 100k); then, as you make each payment, it reduces that equity stake. Because these are personal finances used to fund the business operation, that's probably the easiest way of doing it.

AliQuint · ‎September 28, 2020

Hi lashedlifter,

I have under "other assets" an account named "Loan to Shareholder" would that qualify?

or would I open an "Equity Stake Account" to register the mortgage on my personal loan (under "other assets")

Thanks,

Ali

LeithG · ‎September 29, 2020

Hi AliQunit:

If you were to record it under your Loan to Shareholders account, that account would likely show the reverse amount of what you'd expect. What you may wish to do is create a section of accounts under Owner's Equity on your balance sheet including your Loan to Shareholders, and also your Shareholders Loan to Business.

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