Welcome to the Community, @rossintheair-gma. Thank you for choosing QuickBooks Online as your business startup partner.
I’m happy to walk you through the steps of how you can set up a loan to give your business a start.
When purchasing new assets, you’ll need to first set up a liability account.
Let me guide you on how:
- Go to Settings, then select Chart of Accounts.
- Select New to create a new account.
- From the Account Type ▼ dropdown, select Non-current liabilities. If you plan to pay off the loan by the end of the current financial year, select Current Liabilities instead.
- From the Detail Type ▼ dropdown, select Notes Payable (or Loan Payable).
- Give the account a relevant name, like "Loan for a car" or "Covid-19 relief loan."
- Choose when you want to start tracking your finances. In the Unpaid 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.
- Select Save and close.
From there, you’ll need to create a Journal Entry to apply the load to the proper asset accounts. Here’s how:
- Click + New on the left navigation pane then, select Journal entry.
- On the first line, select the liability account you just created from the Account dropdown. Enter the loan amount in the Credits column.
- On the second line, select the appropriate bank account from the Account dropdown. Enter the same loan amount in the Debits column.
It would be best to consult your accountant to further guide you on this. This process can get tricky, and they know how to handle the next steps.
Once everything is all set, you have now set up a loan for an asset that’ll be used for your business.
For more details about recording loans in QBO, feel free to visit this article: Set up a loan in QuickBooks Online.
Additionally, I’ll be adding these articles here that may come in handy in setting up your loans:
Keep me posted if you still have questions or concerns about loans in QBO. I'll be around for you. Have a great day!
