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I have a unique situation. The gentleman I do books for owns numerous businesses. He has borrowed money from an investor who is the main investor for one of the companies. He has a written agreement to pay the investor loan back by giving him 7% of each sale made within the other companies. The investor doesn't want the cash, he wants the 7% owed him applied to the loans we have with him. How do I record this?
Hi there, @Sunnytears1959,
Welcome, and thanks for taking the time to post here in the Community. I'm here to provide some information about recording loan payments in QuickBooks Desktop (QBDT).
There are a few things you need to set up first before applying the payment to the investor. Among these are:
Let's start by setting up a liability account for the loan. Here's how to do it:
After that, here's how to set up a supplier for the bank or company you need to pay for the loan:
Next, let's go ahead and create an expense account so you can track interest payments or fees/charges. Here's how to do it:
Once done, you can now proceed with recording the loan amount and the payment. You may refer to this article and go directly to steps 4 and 5 for the detailed steps to do it: Manually track loans in QuickBooks Desktop.
If you want to keep track of your loans and be reminded about upcoming payments, you can track and manage your loans with the QuickBooks Loan Manager.
Let me know if there's anything that I can help you with the process or anything else in QuickBooks. Take care and have a great rest of the day!
Thanks for the advice. My accounts are already set up.
Now I need to know how to record the dispersing of the cost shares AS A LOAN PAYMENT instead of as a cash payment.
Hello Community Users, we just wanted to add to this thread. The best thing to do in the instance of applying profit shares to a payee's loan would be a journal entry. On the journal entry you would select the 2 chart of accounts you are wanting to increase or reduce and then save the entry. We'd recommend consulting with an accountant.
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