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Experienced Member

Bank Transaction and Line of Credit transaction

I have a line of credit at the same bank as my checking account.  I download the transactions and in my checking account it shows a transfer (payment) to the line of credit I made but in the line of credit account it only shows the principal amount of the payment.  How do I match this up and how do I enter the interest?     

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Best answer 11-14-2018

Accepted Solutions
Established Community Backer ***

Re: Bank Transaction and Line of Credit transaction

a line of credit is borrowing money, so the payment has to be split, part of it goes to interest expense and the remainder goes to pay down the line of credit

 

you can fix this with a journal entry for the amount of interest paid

debit interest expense, credit the line of credit account, back date to the payment date

 

 

8 Comments
Established Community Backer ***

Re: Bank Transaction and Line of Credit transaction

a line of credit is borrowing money, so the payment has to be split, part of it goes to interest expense and the remainder goes to pay down the line of credit

 

you can fix this with a journal entry for the amount of interest paid

debit interest expense, credit the line of credit account, back date to the payment date

 

 

Experienced Member

Re: Bank Transaction and Line of Credit transaction

should  the Journal list be in my case where the bank download.  or  creat one seprately. I am a different person from the orginal person asking the quiestion.

Experienced Member

Re: Bank Transaction and Line of Credit transaction

with that said  I too  used the same bank with my line of credit (overdraft line).  so does it sense to make the overdraft that comes the bank download and make it the Journal?

QuickBooks Team

Re: Bank Transaction and Line of Credit transaction

Hi there, @razor518.

 

Please allow me to join the thread and help share a little more information about handling bank transaction and line of credit transaction.

 

Yes, you can create a Journal Entry, just ensure that the amount posted by the bank is the same amount in the Journal Entry created. Also, please make sure that the dates are correct and you've debited the interest expense correctly.

 

To learn more about creating a journal entry in QuickBooks Online (QBO), you may check this article: Create a journal entry.

 

Please don't hesitate to add a comment below if you have any other banking questions, I'll be always here to help you. Have a great day ahead!

Community Contributor *

Re: Bank Transaction and Line of Credit transaction

I need help please.

 

I have a line of credit = 150,000.  The bank account shows i have 150,000 to take from.  The problem I am having:

 

When i connect the bank feed as an "other current liability" the bank balance shows 150,000 and the quickbooks balance shows -150,000.

 

If i switch it to a "Bank Account" type - the bank balance shows - 150,000 and the QB balance shows 150,000.

 

Why type of account should this be listed as?

 

Thank you!

QuickBooks Team

Re: Bank Transaction and Line of Credit transaction

Hi @GinaBCBO,

 

You’ll need to edit the Account type of your Line of Credit account. Let me discuss this further so you can successfully connect to your bank feeds.

 

In QuickBooks, you can’t connect a liability account to your bank feeds. It’s possible that you’ve set up your line of credit account as a liability.

 

To correct this, you’ll need to change the Account Type of your Line of Credit. Here’s how:

  1. Hover your mouse on Accounting from the left panel.
  2. Choose Chart of Accounts.
  3. Locate the Line of Credit account.
  4. Select Edit from the Action column.
  5. Choose Credit Card from the Account Type and Detail Type drop-down.
  6. Click on Save and Close.

Once done, you can reconnect your account for bank feeds.

 

You can refer to this article to know more about setting up and tracking your line of credit.

 

Please let me know if you have any other questions or concerns. I’ll only be a post away.

Community Contributor *

Re: Bank Transaction and Line of Credit transaction

@Alessandra_B 

 

Thank you for your reply.

 

I am confused.  I have a few other current liability accounts that are connected to bank feeds and they work perfectly fine.  The difference with this one is that the bank made the entire 150,000 available, where as the other ones when you take from it, it grows.

 

Currently the bank gave him 150,000 and they took $450.00 from it making the balance $149,550.00.

 

When I change this to a credit card account the bank balance says +149,550.00 and the quickbooks balance says -149,550.00.  I cant seem to get them to match.

 

Please help!

QuickBooks Team

Re: Bank Transaction and Line of Credit transaction

Thank you for getting back to me, @GinaBCBO.

 

I can explain this further to help you with your Line of Credit account.

 

Setting up your Line of Credit account as a Credit Card allows you to make purchases using it. It also allows you to add your transactions is QuickBooks to match them.

 

In addition, the negative balance denotes an overpayment with your bank, while a positive amount denotes your payables.

 

Lastly, connecting your Other Current Liabilities account won't allow you to add your transactions in QuickBooks.

 

Please let me know if you have any other questions or concerns.