Hi joy_financial,
Welcome to Community! QuickBooks Online is a dynamic program with the features you need, to accomplish your bookkeeping goals with confidence. Setting up a loan and recording payments can be done seamlessly. I'd be glad to assist!
The first thing you'll need to do is set up a liability account to record what you owe. Here's how;
1. Open your Settings ⚙ and select Chart of accounts
2. Click on New to create a new account
3. For the Account Type, use the ▼ dropdown menu and choose Long-term Liabilities
Note: If you plan to pay off the loan by the end of the current fiscal year, select Other Current Liabilities instead.
4. In the Detail Type, use the ▼ dropdown menu and select Notes Payable (or Loan Payable)
5. Give the account a Name
6. Set a Default Tax Code
7. 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. Hit Save and Close.
You're all set and ready to record the funds. When you make a payment towards the loan, you'll record it to this account.
Follow these steps if you've deposited all of the money for the loan into the bank;
1. Select + New from the left menu, then choose Journal entry
2. On the first line, select the liability account you just created from the Account dropdown ▼ 3. Enter the loan amount in the Credits column
4. On the second line, select your bank account from the Account ▼ dropdown and enter the same loan amount in the Debits column
6. When you're done, hit Save and close.
Here's how to record a loan repayment;
1. Select + New, then Cheque
2. Add a cheque number if you plan to send an actual cheque. If you use direct withdrawal or an EFT, enter Debit or EFT in the Cheque no. field.
3. Enter the following in the Category details section of the cheque:
- On the first line, select the liability account for the loan from the Category dropdown. Then enter the payment amount.
- On the second line, select the expense account for the interest from the Category dropdown. Then enter the interest amount.
- On additional lines, add any additional fees. Select the appropriate accounts from the Category dropdown.
When you're done, select Save and close.
If you have any other questions, please don't hesitate to reach back out. We're always happy to help!
