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Join nowin this instance you have to use a journal entry
debit the expense account and credit the loan to others asset account
Thanks this is helpful, but a follow-up question arises. When I initially recorded the loan as a journal entry, there was a DEBIT to the "loan" account and a balanced CREDIT to "accounts receivable".
Now when I make the journal entry to credit the loan account and debit the expense account, the accounts receiveable amount doesn't decrease, it stays at the original loan amount. I'm thinking this is wrong and accounts receivable should go down.
To rectify, I believe either I have to change the original loan journal entry to be a credit to the EXPENSE account or the loan repayments should debit "accounts receiveable" instead of expenses.
Does this make sense?
when you made the loan, you should have written a check and use that loan account as the expense (reason) for the payment. as a journal entry that would be debit loan, credit bank. A/R does not come into it, A/R is for sales invoices in QB.
I see, that's what I mixed up. I followed the instructions here https://quickbooks.intuit.com/learn-support/en-us/accounts-receivable/track-customer-loans/00/185723
on how to make a loan to customer, which suggests balancing the "loan" with "A/R".
Thanks for your help.
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