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sentinellockandd
Level 1

Setting up a Loan in QBO

I read this article:

 

https://quickbooks.intuit.com/learn-support/en-us/bank-loans/set-up-a-loan-in-quickbooks-online/00/1...

 

and found that what I was seeing on my screen didn't match the instructions. Specifically, the instructions state to put in the loan amount in a negative number in the "Amount" field, but what I see is an "Unpaid Balance" field. Do I still enter the loan amount as a negative number?

Solved
Best answer January 07, 2020

Best Answers
Adrian_A
Moderator

Setting up a Loan in QBO

Yes. You'll still need to enter the amount as negative, sentinellockandd.

 

The Amount box was from the old interface. In the new QuickBooks released, when you select either Long Term Liabilities or Other Current Liabilities as the Account Type, you'll have to enter the amount on the Unpaid balance field.

 

After setting up a liability account, you're good to record the money you got from the loan. Proceed to Step 2 in the article you've shared to do this.

 

Feel free to tag me if there's anything that I can help you with.

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7 Comments 7
Adrian_A
Moderator

Setting up a Loan in QBO

Yes. You'll still need to enter the amount as negative, sentinellockandd.

 

The Amount box was from the old interface. In the new QuickBooks released, when you select either Long Term Liabilities or Other Current Liabilities as the Account Type, you'll have to enter the amount on the Unpaid balance field.

 

After setting up a liability account, you're good to record the money you got from the loan. Proceed to Step 2 in the article you've shared to do this.

 

Feel free to tag me if there's anything that I can help you with.

View solution in original post

sentinellockandd
Level 1

Setting up a Loan in QBO

Thanks so much

Joshua R
QuickBooks Team

Setting up a Loan in QBO

Hey there, @ sentinellockandd.

 

Thank you for getting back with us, so glad your issue has been resolved.

 

If you have any other questions, just reach out. The Community is always here to help.

robzsky
Level 1

Setting up a Loan in QBO

I followed the steps in the attached link:  https://quickbooks.intuit.com/learn-support/en-us/bank-loans/set-up-a-loan-in-quickbooks-online/00/1...

 

When I do this, as it states, "This puts the entire loan amount into your bank account."  Which it does (the bank account now shows the entire amount, but the amount under long term liabilities on the balance sheet it shows as 0.00.  Shouldn't it show the entire amount as a negative under this category in the BS?

 

Thank you so much for any clarification on this.

 

 

KlentB
QuickBooks Team

Setting up a Loan in QBO

Hi there, robzsky.

 

Once we're done creating the account to track what you owe for the loan, we'll have to move the money directly into your bank account, via journal entry.

 

We'll also have to take note that this process will zero out the liability to transfer the amount to the bank as an asset. This way, we can select that bank account as the payment account when we record expenses or purchases.

 

Then, we can now record the loan payment using a check. You can follow the step 3 of this article to be guided in doing it. 

 

In case you'll need to track where you're company stands in terms of expenses and revenue, you can pull up these popular custom reports to get awesome insights.

 

I'll be right here to continue helping if you have any other concerns or follow-up questions. Stay safe and have a great rest of the day.

robzsky
Level 1

Setting up a Loan in QBO

Ok, it makes sense.  As an experiment, I created a check to pay the principal and interest as in Step 3.  The principal amount of my hypothetical check was $1000.  After I did that the balance sheet now says $1,000 next to the liability account that I set up for the loan.  Is this correct?  If it is, then I'm golden LOL. (I'm assuming that eventually all of the principal will eventually be paid and the amount on this line will read the total of the loan.  (Of course, the interest will show up on the P&L as an expense.)  

 

If I'm following the logic correctly when the loan is paid off it'll show the total on the BS. But then what do I do with it?  Won't it still show on the BS as a positive amount under long term liability? 

 

Thanks for your help. 

Rasa-LilaM
QuickBooks Team

Setting up a Loan in QBO

Hello there again, @robzsky.

I appreciate you for following the resolution steps and sharing to us its result. Let me share some information on how the loan payment is shown on the Balance Sheet Report.


Yes, you’re correct the amount will show next to the liability account. When you pay the transaction, it decreases your payable.


Once you open the Balance Sheet Report, it will show as zero under the Long Term Liability Account. A negative amount will also display on the Transaction Report. I've attached screenshots for visual reference.

bs.png bs1.png
QuickBooks Online is a diary of your business that keeps track of what’s happening to the actual transactions. Make sure not to void/delete the actual loan or payment to ensure you have a record of the entry.

 

However, you can delete the dummy transaction created to avoid duplication. Here’s how:

 

  1. Tap the Expenses menu on the left panel to choose the Expenses tab.
  2. On the Expenses Transactions page, mark the box beside the check you’re working on.
  3. From there, hit the drop-down arrow under Action to choose Delete.
  4. Click Yes to confirm the deletion.

For future reference, the following guides provide an overview of when to delete or void an entry as well as additional information about the financial statement.

 

Let me know if you have any clarifications or other concerns. I’m here to answer them for you. Enjoy the rest of the day.

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