How do I create a loan that pays a credit card, with a remaining balance that gets deposited into the checking account?

Hi, @Brenda369. You can set up a loan account in QuickBooks Desktop and record the initial loan amount while allocating portions to fees, a credit card payment, and depositing the remaining balance into your checking account. Follow these steps:

Step 1: Set up a loan account:

1. Go to the Lists menu and select Chart of Accounts.
2. Click the Account dropdown, then select New (or press Ctrl + N).
3. Select Other Account Types, then choose:
   * Other Current Liability for loans payable within a year.
   * Long Term Liability for loans payable beyond a year.
4. Click Continue, then enter the account name and optional details.
5. Select Save & Close.

Step 2: Record the loan amount and its allocation:

1. Go to the Banking menu and select Make Deposits.
2. In the Received From field, enter the lender's name (you can set them up as a vendor if they aren't already).
3. In the From Account field, select the loan account you created in Step 1.
4. Enter the full amount in the Amount field.

Step 3: Allocate portions of the loan using journal entries:

1. Go to the Company menu, then select Make General Journal Entries.
2. Enter the loan date in the Date field.
3. Follow this structure:
   * Debit the Credit Card Account: For the portion paying off the credit card, debit the amount to the credit card account.
   * Debit the Fee Expense Account: For any fees associated with the loan, create an expense account (of not already set up) and debit the fee portion here.
   * Debit the Checking Account: For the portion of the loan that remains as a deposit, debit the amount to the checking account.
   * Credit the Loan Account: Credit the total loan amount to the liability account created in Step 1.
4. Double-check the entries to make sure they're balanced and accurate.
5. Hit Save & Close.

Step 4: Verify you accounts:

1. Go to the Reports menu, then select Accountants & Taxes.
2. Click on Transaction Detail by Account or choose similar reporting tools to ensure loan amounts were allocated correctly.
3. Once done, check your liability account to confirm the loan balance matches what was outlined in your loan terms.
   
   Disclaimer: We recommend consulting with your accountant or tax professional before recording journal entries or making accounting changes in QuickBooks. Journal entries can have an impact on your financial reports and tax filings, and an accountant can help ensure accuracy and compliance.
   
   

I’ll share this article as your reference for recording a loan and properly accounting for its parts: Manually track loans in QuickBooks Desktop.

Let us know if there are any additional questions.

Thank you for the response! When I performed these steps, it created the initial deposit into the checking account per Step 2. Then an additional deposit for the actual deposited amount, as per Step 3 debiting the checking account. It did zero out the credit card which is good, but then it doubled the amount in the liability account created in Step 1, as per the instruction in Step 3 crediting this account. Was the initial deposit step necessary or did I do something wrong?

Beautiful, and simple, thank you!