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Race-MX
Level 4

Can I create a new liability loan without adding an asset?

Can I just create a loan and record payments or is creating another account for assets required? 

4 Comments 4
Bryan_M
QuickBooks Team

Can I create a new liability loan without adding an asset?

Thanks for posting here, @Race-MX.

 

Let me share info about setting up liability loans.

 

You don't need to create another asset, account unless you don't have a bank account set up in QuickBooks Online (QBO).

 

I'll also add steps on how you can set up a liability account to record what you owe. Feel free to follow the steps below:

 

  1. From the Settings, select Chart of Accounts.
  2. Choose New to create a new account.
  3. Go to the Account Type ▼ dropdown, and select 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. From the Detail Type ▼ dropdown ▼ dropdown, select Notes Payable.
  5. Provide the account with a relevant name, like "Loan for a car" or "Covid-19 relief loan."

 

For more info, check out this article: Record the loan for an asset in QuickBooks Online.

 

You might want to learn how to use a loan to close open invoices. Check out this article: Track customer loans in QuickBooks Online.

 

Feel free to return here if you have additional questions about managing loans. I'll be willing to lend a hand. Keep safe and have a good one.

Race-MX
Level 4

Can I create a new liability loan without adding an asset?

The asset (the money) isn't going into my account, it's going direct to the vendor providing services so the money isn't going into my account, but I need to set up a loan in QB to track the loan and record interest payments and skip entering the asset. Can I just set up the loan by itself?

Nicole_N
QuickBooks Team

Can I create a new liability loan without adding an asset?

Yes, @Race-MX, you can.

 

All you have to do is set up a liability account to track the loan. If you don't want to apply the loan to the asset accounts, then you don't need to create a Journal Entry. You can follow the steps shared by my peer above or utilize this article: Set up a loan in QuickBooks Online.

 

Another option is that you can put it in the Cash On Hand account if it didn't go through a bank. 

 

I'm adding this article to learn more about tracking and recording loans: Customer loans in QuickBooks Online.

 

Reply below if you have additional questions. Keep safe.

Rainflurry
Level 14

Can I create a new liability loan without adding an asset?

@Race-MX 

 

There is no asset in this case, there's an offsetting expense.  Therefore, you need to enter the offsetting expense when you draw on the loan.  To do that, enter a bill for the vendor.  On line 1, enter the expense for the services.  On line 2, enter the loan liability account and enter the same amount as a negative.  That will increase your expense and the loan balance by the same amount.  Because the bill amount is $0, it will show as paid.    

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