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Level 1

How do I record a loan for asset ?

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 ?

Solved
Best answer 03-11-2019

Best Answers
Highlighted
Level 6

How do I record a loan for asset ?

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:
  1. Select Gear > Chart of Accounts.
  2. Select New.
  3. Select Other Current Liabilities (or Current Liabilities) or Long Term liability.
  4. Select the detail type Loan Payable.
  5. Give it a meaningful name, like "Equipment Loan from Finance Company Name".
  6. 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

  1. Select Plus (+) >  Check
  2. Complete the Check screen with all applicable information.
  3. 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.
  4. 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.
  5. Select Save and Close.

View solution in original post

2 Comments
Highlighted
Level 6

How do I record a loan for asset ?

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:
  1. Select Gear > Chart of Accounts.
  2. Select New.
  3. Select Other Current Liabilities (or Current Liabilities) or Long Term liability.
  4. Select the detail type Loan Payable.
  5. Give it a meaningful name, like "Equipment Loan from Finance Company Name".
  6. 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

  1. Select Plus (+) >  Check
  2. Complete the Check screen with all applicable information.
  3. 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.
  4. 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.
  5. Select Save and Close.

View solution in original post

Highlighted
Level 1

How do I record a loan for asset ?

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

 

Thanks,

Angus