LOC Interest payments

JG1357 · ‎January 04, 2022

Hi All,

I have setup my chase line of credit (LOC) as a credit card account type in QBO and come across a situation which I don't know how to solve. Was hoping someone could help.

I transferred 10k from the LOC to the checking account which increased the LOC account from zero to 10k in QBO just like a credit card account should work. The LOC account since then has accumulated $21.25 interest but the QBO balance still shows 10k owing (not $10,021.25).

This week I made a payment of $1000 principal and $21.25 interest which generated two separate transactions on the LOC account which show up in transactions. My checking account shows one transaction of $1021.25.

I categorized both of the LOC transactions as Transfers from the checking account. Then went to the checking account and matched the $1021.25 to those LOC transactions.

Now the balance on the on the LOC account is $8978.75 when it should be $9000.00 and I don't know how to fix this so it matches up?

Thanks for your help!

AlexV · ‎January 04, 2022

Hi JG1357!

You're almost there. Allow me to help you in recording the payment to your line of credit.

The reason why it shows $8978.75 instead of $9000.00 is that, when you record the payment, you categorized both principal and interest to the LOC account. You'll want to use an expense account to track the $21.25.

This is how it looks like:

You can simply open and edit the payment you have recorded. Then, add the $21.25 as another line item with an expense account.

I also added these articles to know more on how to track LOC and how to reconcile your accounts:

Feel free to post a comment below if you have more questions about recording transactions. I'll help you!

JG1357 · ‎January 04, 2022

Thanks for the reply Alex. Really appreciate it.

I understand what you are saying but the new issue is when I split the transaction - $21.25 going to an interest account as an "expense" and then $1000 going to the LOC as a "transfer" it actually brings the balance down another $1000 to $7978.25 which confuses me?

Sorry I know this must feel like amateur hour :( Appreciate your help!

DebSheenD · ‎January 04, 2022

Thanks for providing detailed information with your concern, JG1357.

I can provide clarification about recording payment to your line of credit.

Since you've transferred $1000.00 from LOC, so this account will down from 9K to $7978.25. If you don't like this process, you can check this article and follow detailed steps on how to transfer funds in QuickBooks Online: Set up and track a line of credit.

You can check this article to help you out on how you can export customer information from QuickBooks Online to Excel:

Let me know if there's anything else I can help you with recording payments. I'll be right here whenever you need additional information.

JG1357 · ‎January 05, 2022

Thanks for the reply but this does not answer my question and the article only covers setting up a LOC account as a line of credit type of liability account, not and LOC account as a credit card liability type.

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