How do I record a loan for asset ?

innoequipsolinc · ‎March 11, 2019

I have purchased an asset(equipment/truck) I have provided a partial deposit to the vendor, and will forward the balance of the deposit to the finance company.

I have created a bill from supplier for equipment, and made the first deposit as a bill payment

how do I set up the finance company? Supplier or bank ?

how do I record the part of the deposit I sent to the finance company ?

how do I set up loan for tracking payments, and interest ?

lyndaartesani · ‎March 11, 2019

The finance company will be your vendor.

First you need to set up the loan payable, you can create a liability account. You'll choose from creating an Other Current Liability (or Current Liabilities) if the loan is to be repaid within the current fiscal year, or a Long Term Liability (or non-current liabilities) if the loan will continue to be repaid after the current fiscal year.

Set up a the loan:

Select Gear > Chart of Accounts.
Select New.
Select Other Current Liabilities (or Current Liabilities) or Long Term liability.
Select the detail type Loan Payable.
Give it a meaningful name, like "Equipment Loan from Finance Company Name".
Select Save and Close without entering an opening balance..

To record the part of the deposit to the finance company, enter the check and apply it to the asset like you did when you paid the supplier for the equipment directly. The loan would be recorded with a journal entry for the beginning loan balance credited and the asset (equipment) debited.

Recording a loan payment to track payments and interest

Select Plus (+) > Check
Complete the Check screen with all applicable information.
If you send an actual check, enter the check number. If you pay online, use direct withdrawal, or EFT, enter Debit or EF" in the Check/Cheque # field.
In the Account details area of the check, enter
1. The liability account for the loan and the amount of the payment going to the principal on line 1;
2. enter the interest expense account and amount of interest being paid on line 2.
3. If there are any additional fees, enter them and the appropriate account on the following lines.
Select Save and Close.

View solution in original post

lyndaartesani · ‎March 11, 2019

The finance company will be your vendor.

First you need to set up the loan payable, you can create a liability account. You'll choose from creating an Other Current Liability (or Current Liabilities) if the loan is to be repaid within the current fiscal year, or a Long Term Liability (or non-current liabilities) if the loan will continue to be repaid after the current fiscal year.

Set up a the loan:

Select Gear > Chart of Accounts.
Select New.
Select Other Current Liabilities (or Current Liabilities) or Long Term liability.
Select the detail type Loan Payable.
Give it a meaningful name, like "Equipment Loan from Finance Company Name".
Select Save and Close without entering an opening balance..

To record the part of the deposit to the finance company, enter the check and apply it to the asset like you did when you paid the supplier for the equipment directly. The loan would be recorded with a journal entry for the beginning loan balance credited and the asset (equipment) debited.

Recording a loan payment to track payments and interest

Select Plus (+) > Check
Complete the Check screen with all applicable information.
If you send an actual check, enter the check number. If you pay online, use direct withdrawal, or EFT, enter Debit or EF" in the Check/Cheque # field.
In the Account details area of the check, enter
1. The liability account for the loan and the amount of the payment going to the principal on line 1;
2. enter the interest expense account and amount of interest being paid on line 2.
3. If there are any additional fees, enter them and the appropriate account on the following lines.
Select Save and Close.

angho721 · ‎April 27, 2020

Can you do this for QuickBooks Online Self-Employed? If not what is my alternative

Thanks,

Angus

AmandaVanleuve · ‎April 29, 2021

How should I create the account - Equipment Asset to be debited?

JamesM4 · ‎April 29, 2021

Hi AmandaVanleuve. I appreciate you chiming in on this thread. It's important you're able to create the appropriate accounts and in order, to ensure accuracy in your books, I recommend contacting an accounting professional for expert advice. Doing this will help prevent any future discrepancies in your books. You can also reach out to accounting professionals on our site using this link here. Otherwise, check out this helpful article with more info on how to

Add an account to your chart of accounts in QuickBooks Online.

Let me know if you have additional questions. I've got your back.

Lindsey Huber · ‎March 03, 2023

.

Alex M · ‎March 03, 2023

Hi there Lindsey Huber,

It's vital that all your transactions be entered correctly in order for your books to be well-balanced. QuickBooks Online is a great tool able to help keep track of expenses and sales in order to see the profit of your company. I can point you in the right direction for assistance with entering this equipment loan.

In order to know how you should be entering this equipment loan, and what types of accounts should be affected, I recommend speaking with your accountant for assistance. Their accounting expertise will be best to guide you in how this should be affecting your books so that all is correctly represented. You can invite your accountant to QuickBooks Online so they can see your books by going to the My accountant tab. You can also find an accountant near you that has experience using QuickBooks by clicking the Find a pro to help button located in that section.

If you have any other questions, feel free to reach out here.

Topics

Training

Community

Resources

How do I record a loan for asset ?