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ronho2001
Level 1

In quickbooks banking, how do i classify a line of credit deposit

 
5 Comments 5
Teri
Level 9

In quickbooks banking, how do i classify a line of credit deposit

If you received cash, you debit cash.  If you paid cash, you credit cash account. 

 

Cash = Bank in QB.

 

So when you debit cash, the credit goes to liability account called Line of Credit and vice versa.

 

When you pay interest, that should be a debit to interest expense account.

vpcontroller
Level 11

In quickbooks banking, how do i classify a line of credit deposit

@ronho2001 

Line of Credit is a liability account in the books. So, you will need to create a new Line of Credit account in the Chart of Accounts.

If you're thinking of bank connect and download bank feed just like bank accounts or credit card accounts, you will need to create a new account this way:

 Name: Line of Credit (LOC) Bank Name

Account Type: Credit Card

Detail Type: Credit Card

(Why Credit Card type? Because that's the only liability type account, you can connect in QBO banking tab).

 

If you don't need to connect then, you can create a new account this way:

Name: Line of Credit (LOC) Bank Name

Account Type: Other Current Liabilities

Detail Type: Other Current Liabilities

 

Once you have opened the new credit card type or other current liability type account, in your Banking tab where you see LOC deposit, click that transaction row, switch the radio button to RECORD TRANSFER (if it's in Add button) and select that account under Select Transfer Account. Select Record Transfer. Done. Next time when you have got a new deposit from the LOC, it should remember it. 

 

Hope this helps!

 

courtb1
Level 1

In quickbooks banking, how do i classify a line of credit deposit

@vpcontroller I know this post is old, but I was hoping you might be able to provide clarification on a related question. My bank charged a $350 fee to set up my line of credit. Our line of credit has been added to our Quickbooks in the manner you described to the OP (i.e., we added it as a credit card and we record draws from the LOC as transfers between our LOC and checking account). However, I'm not sure how to categorize he $350 setup charge. I've tried counting it as a bank fee, and I've also tried recording i as a transfer (which was problematic because we never actually received that money, of course). The quickbooks balance for the LOC is off by $350, as the "bank balance" is $350 higher than the "in quickbooks" balance. Can you advise?

DemiM3
Level 1

In quickbooks banking, how do i classify a line of credit deposit

This has been happening to me as well. Quickbooks Online is pulling in Interest Expenses and Fees as "Money Received" versus "Money Spent". It is so weird, and I have had to manually correct the entries because of this. Hopefully they fix it soon.

DemiM3
Level 1

In quickbooks banking, how do i classify a line of credit deposit

Quickbooks is doing the same with my Line of Credit, it is pulling in Interest Expenses as "Money Received" rather than "Money Spent". Super frustrating, will throw off your books, and you need to manually fix it and reconcile the account. Look at what column it is going into, and if it doesn't make sense, don't add it via the bank transactions. Manually add it as an expense. 

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