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Level 1

I need to offset a merchant account loan to retained earnings. How do I do that?

I have a merchant account loan on my balance sheet that was incorrectly categorized as a current liability on my balance sheet. My accountant told me to offset loan with retained earnings. Can someone tell me how to do that?
3 Comments
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Level 15

I need to offset a merchant account loan to retained earnings. How do I do that?

If you borrowed money from the merchant account, then it is a liability.

typically the merchant account takes some portion of your sales and applies it to the balance due, paying it down as your business makes sales.

 

Typically you book the gross sales, less the merchant account fee, and then you can make an entry for the loan payment.

A deposit might look like this
income, $$$$$$ (gross sales)
merchant fee expense, -$$$ (negative number)
Merchant loan payment, -$$ (negative number)

Net amount

 

But if you are paying an accountant, why is he not helping you make entries? he works for you, or get another one, accountants are a dime a dozen.

And what he told you to do makes no sense to me. RE is distributed to the owner(s) at the start of the year.

Highlighted
Level 1

I need to offset a merchant account loan to retained earnings. How do I do that?

This is a merchant account loan that was paid off long ago. The bookkeeper I had at the time set it up but never took out the payments and fees. So I need to just 0 it out. I pay my accountant to do my taxes. I don't have him on retainer. I thought this community was an alternative to tying up Quickbooks online representatives. Am I not supposed to ask questions here? 

Highlighted
Level 15

I need to offset a merchant account loan to retained earnings. How do I do that?

No, asking questions here is actually going to get you better answers than calling intuit, sorry I gave you the wrong impression.

 

Now that you have added the information about it being paid off with out the pay off paying down the loan, his advice makes more sense

 

journal entry, debit the loan account, and credit RE

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