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Level 1

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

 
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QuickBooks Team

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

Hello there @kwalker34,

 

You can create an asset account to track the value and depreciation of your assets. Loan accounts can be an asset account or a long term liability account. However, it's best to work with your accountant to know the best methods used.

 

To set up a long term liability account:

 

  1. Go to Accounting, then Chart of Accounts.
  2. Select New, then Long Term Liabilities as Account Type.
  3. Choose Notes Payable as Detail Type. Type the Name of the account.
  4. Click Save and Close.

Once done, record your loan by creating a journal entry. Here's how:

 

  1. Go to +New, then Journal entry.
  2. On the first line, select liability account under Account column. Enter the loan amount in the Credits column.
  3. On the second line, choose the asset account or the appropriate account. Enter the loan amount in the Debits column.
  4. Click Save and close.

After that, record your loan payment by creating an expense or a check.

 

  1. Go to +New, then Check.
  2. Enter the following information below:
    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.
  3. Hit Save and close.

These steps will help you keep track of your loan payments. You can learn more about loan payments at these links here:

 

We also have a guide on payments that I'm sure you'll find helpful. It has additional resources and steps related to QuickBooks payments.

 

That'll do it. Please don't hesitate to click the reply button anytime if you have questions. We're here to lend a hand. Thanks for joining us today and I wish you have an awesome day ahead.

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Level 1

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

Sorry, it’s so hard to be specific with the limited characters for the question. We already have the loan all set up we have had it for 3 years it is a SBA loan. With the covid situation the SBA is actually making the payments for us for 6 months so the loan is being reduced just not by us. We need to show that. 

Highlighted
QuickBooks Team

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

Hey there, Kwalker34.

 

Thanks for following back up with us. While journal entries are used sometimes as a last option for entering transactions, they can be helpful for situations like yours. If you need help with understanding the accounting procedure for this entry you can find an account to help at any time. Once you speak to that account or your own simple create the journal entry by following these steps:

 

  1. Select +New
  2. Select Journal entry. Or, if you're in Business view, switch to Accountant view first. Then come back to these steps.
  3. Fill out the fields to create your journal entry.
  4. Select Save and New or Save and Close.

You're journal entry will be put in to your specifications. I'm here as well to assist with any questions you may have. You can reply below at any time to reach me. Have a great day!

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Level 2

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

I am also in this situation and you did not answer the question. How do you show the pricipal balance go down when the SBA is making the payments not your business?

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QuickBooks Team

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

Hello parksbarbie,

 

You can create a Journal Entry to reduce your loan and increase the balance in SBA loan. Here's how: 

  1. Click + New.
  2. Select Journal entry. Or, if you're in Business view, switch to Accountant view first. Then come back to these steps..
  3. Fill out the fields to create your journal entry.
  4. Click Save and new or Save and close.

However, I suggest reaching out to your accountant to help you verify what accounts that you'll have to use. 

 

You can also refer to these help articles for more information about unpaid bill reports:  Accounts Payable Reports.

 

Post a reply if you need anything else. I'll be here to help.

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Level 11

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

@kwalker34 

 

"QB accountant said JE against other income boss thinks an equity account?"

 

Many would agree with your QB Accountant, it should be recorded as Other Income.

 

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Level 1

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

After speaking to our accountant we are doing a monthly JE debiting our principal and interest accounts and crediting other income 

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Level 1

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

I have the same issue and need to know how to record the payment that the SBA is making on our behalf. Our libility is going down, but I have no idea which account to record the funds coming from, Should I record it as coming from retained earnings?

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Level 11

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

@lakemonsterbrewi 

 

"I have the same issue and need to know how to record the payment that the SBA is making on our behalf. Our libility is going down, but I have no idea which account to record the funds coming from, Should I record it as coming from retained earnings?"

 

Also as Other Income.

There is no such thing in general accounting like coming from Retained Earnings.

 

 

Highlighted
Level 1

The SBA is making our business loan payment for 6 month. How is anyone else recording this in QB accountant said JE against other income boss thinks an equity account?

Thankful for everyone talking and helping out with this!  The auto QB support is ZERO help my goodness.

 

I was going to use other income as well per my research, but I had two questions about this. 

 

1. Someone on a different thread mentioned whether it was taxable or not, certainly it is not taxable correct?

 

2. Are you just doing a two line entry to reconcile the loan balance offset to other income and not recording any interest?  I don't see why we would need to note that someone else paid interest, but it seems odd to just forget it entirely.

 

Thanks in advance for help!

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