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the_tile_setters
Level 4

Line of Credit

Hi,

I use QB Premier Contractor Edition 2019 Desktop.

I have a new Line of Credit and have made 1 purchase for

my business. I have received my 1st statement and have made my 1st payment.

I paid a little more than the minimum. 

The line of credit was opened when I made the purchase as an option for payment.

The Amount of available credit given to me was about twice as much as the purchase I made.

There is an APR and it is variable. But the Plan for the purchase I made is this:

If the balance is paid off within 30 months the APR (v) is 0%

How do I set this all up in QuickBooks?

Since there is only 1 purchase I would like set the account up and enter that purchase.

Thank you!

2 Comments 2
BigRedConsulting
Community Champion

Line of Credit

Set it up as a liability account.  Then enter your purchase in its register to establish the balance due.

 

When you enter the transaction in the register use the appropriate account for your purchase.  This will usually be an expense account or perhaps an asset account - if you will carry the purchase as an asset on your balance sheet instead of expensing  it.

the_tile_setters
Level 4

Line of Credit

Hi,

I think I did as you said and set it up as a liability account. I can't remeber now lol.  Here is what I see:

In my chart of accounts I have an account named Dell Preferred Account and it's type is "other current liability" that's the new line of credit.  I also have a "Fixed Asset" account named Surface Duo phone, that's the purchase I made with the LOC. The Dell Account is showing a balance of $ -100.00. The Fixed asset account shows a balance of $ 0.00. I have made 1 pmt to the LOC of $100.00. I still have a balance with the LOC but where doles that show up? Did I do it wrong?

Now I'm going to complicate the whole matter lol...

I since have returned the purchase. But It was a bundle and they credited the LOC for only part of the purchase. I'm waiting for the rest to be credited. 

1. Did I set up the LOC properly?

2. How do I enter the amounts being credited  back to the LOC?

 

Thank you for your help!

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