How to set up Charts of Accounts with a LOC - a short term liability - and pay vendors?

Thanks for posting here in the Community forum, @ER222.

You'll need to set up two accounts to properly track a line of credit in QuickBooks Online (QBO). One account is for monitoring the principle, and the other is an expense account to track incurred interest. I'll gladly share the steps with you.

Let's start by setting up a liability account for principle tracking. Before you continue, make sure you’re in the Accountant's view.

Here's how:

1. Go to Settings, then select Chart of accounts.
2. Select New. Then, pick Other Current Liabilities from the Save account under ▼.
3. From the Tax form section ▼ dropdown, select Line of Credit.
4. Enter a name in the Account name field and tap Save.
   

Then, follow these steps to set up an expense account for the interest: 

1. Go to Settings ⚙, then select Chart of accounts.
2. Select New. Then, pick Expenses from the Save account under ▼.
3. From the Tax form section ▼ dropdown, select Interest Paid.
4. Enter a name in the Account name field and tap Save.
   

Moreover, make sure you record the bills or expenses when you pay for things with your credit.

When you make a payment, you can track what you pay back to your bank or creditor. Visit this article and scroll down to check out the two ways to pay back your credit: Set up and track a line of credit in QuickBooks Online.

Feel free to leave a comment below if you have additional questions about your QBO account. I'm always around to help. Have a good one.

Thank you very much for the instructions.  I really appreciate it!

Your are always welcome, ER222!

I'm delighted to hear that my colleague Kevin_C has been of great help in addressing and giving you instructions on managing your chart of accounts. It is our pleasure to assist you anytime.

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