Categorized income - SBAD TREAS 310 MISC

We can set up a liability account to record the loan and its payments in QuickBooks Online for Accountant (QBOA), @Tamo.
 

First, let's set up a liability account to record the loan:

1. Click the Gear icon, then select Chart of Accounts.
2. Click New to create a new account.
3. From the Account Type drop-down menu, select Long Term Liabilities. If you plan to pay off the loan by the end of the current fiscal year, select Other Current Liabilities instead.
4. Click the Detail Type drop-down arrow, select Notes Payable.
5. Give the account a relevant name.
6. Choose when you want to start tracking your finances from the ▼ drop-down arrow.
7. Enter the full loan amount as a negative amount in the Amount field. Since the future payments to the bank are a liability for your business, the amount should be negative.
8. Select Save and close.

Now that you have an account to track what you owe for the loan. Here's how to track the loan money you have to spend. You can enter it all at once, or as in partial payments as you get them.

1. Select + New.
2. Click Journal entry. Or, if you're in Business view, switch to Accountant view first. Then come back to these steps.
3. On the first line, select the liability account you just created from the Account drop-down list. Enter the loan amount in the Credits column.
4. On the second line, choose the appropriate asset account from the Account drop-down arrow. Enter the same loan amount in the Debits column.

This money is an asset to your business. To pay and amortize the debt of an intangible asset, see the Amortization schedule in QuickBooks Online.

Once done, let's record a loan payment:

1. Click + New.
2. Select Check. Or if you're in Business view, follow the steps to switch to Accountant view first. Then come back to these steps.
3. Add a check number if you send an actual check. If you use direct withdrawal of EFT, enter Debit or EF in the Check # field.
4. Enter the following information in the Category Details section.
   1. First line: Liability account for the loan and the amount of payment.
   2. Second Line: Expense account for the interest and the amount.
   3. Additional lines: Any additional fees along with the appropriate accounts.
5. Click Save and close.

In addition, you can run the Balance Sheet report to review your, assets, liabilities and equity in QuickBooks. Just go to Reports and search for Balance Sheet.

I'm always here to help if you have any other concerns or questions. Just tag my name in the comment section and I'll get back to you as soon as I can.

Hi Reymond,

Thank you so much for the detailed explanation!

But I have a question regarding this amount of money from the US government - As I've read you don't have an obligation to return this grant/loan. In this case, do I need all these journal entries anyways?

Maybe I'm wrong but I need to make sure.

Glad to have you back here in the Community, @Tamo.

I'd like to ensure that you'll be able to record your transactions accurately in QuickBooks Online.

To help verify if creating a journal entry is necessary for the amount that you received from the US government, I recommend consulting your accountant. This way, you'll be advised on what is the best course of action for your business.

For your reference, I'm adding here some resources that you can visit about reversing a journal entry and mixing its currencies, in case you need them in the future:

• Reverse or delete a journal entry
• Mixing currencies in journal entries

Know that you can always visit us here if there's anything else that you need. I'll be around to lend a helping hand. Have a great day!

Hey Betty,

Thank you so much for sharing useful details with me.

I'll definitely ask if I need some help :)

Have a great day too!