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040266sps
Level 1

What entries do I make to pay off one loan with a new loan?

 
8 Comments
john-pero
Community Champion

What entries do I make to pay off one loan with a new loan?

Journal Entry net=0

Debit old loan

Credit new loan

 

Unless cash is involved, then you can use either "check" if you had to add money or "deposit" if you received extra. In both of those transaction types you can directly enter the old and new loan accounts in and out

ohbeebee
Level 1

What entries do I make to pay off one loan with a new loan?

If i have an existing line of credit for $50,000 and I am getting a new line of credit for $75,000, how would i enter the new loan so it would pay off the one loan but leave the available monies in the new line? 

CrissyKnny
Level 2

What entries do I make to pay off one loan with a new loan?

I am curious as well.  When we received a new loan, the amount financed paid off the old loan that the lending company sent on our behalf.  I can not seem to figure out how to apply it to the old loan while keeping a balance on the new loan.  

Cindy G
Level 1

What entries do I make to pay off one loan with a new loan?

I'd like to know this myself as I am in the same situation.

Giovann_G
QuickBooks Team

What entries do I make to pay off one loan with a new loan?

Hello, Cindy G.

 

Thanks for utilizing the Community. I'll be glad to sort this out for you.

 

You'll have the option to create a Journal Entry(JE) to keep the new loan balance. I'll show you how.

 

1. Click + New icon.

2. Select Journal entry.

3. On the first line, choose the liability account you created from the Account drop-down. Enter the loan amount in the Credit column.

4. On the second line, select your bank account from the Account drop-down. Enter the same loan amount in the Debit column.

5. Click Save and close.

 

Here's how to create a check to pay the old loan balance:

 

1. Click + New.

2. Select Check.

3. On the first line, choose the liability account for the loan from the Category drop-down. Then enter the payment amount.

4. Hit Save and close.

 

I'll include this article that lists available reports included in your QBO subscription.

 

Let me know if you have more questions about your account. We're here to back you up.

 

 

 

 

 

Cindy G
Level 1

What entries do I make to pay off one loan with a new loan?

Hi,

This was an auto loan. He traded a car with an outstanding balance in on a new car. I need to close out the old car loan and open a new one. No check involved.  

Cindy G
Level 1

What entries do I make to pay off one loan with a new loan?

 
Charies_M
Moderator

What entries do I make to pay off one loan with a new loan?

I appreciate the additional clarification to your concern, Cindy G.

 

Even if it was an auto loan, the suggestion shared by john-pero and the instructions provided by Giovann_G is still applicable except the check creation. However, I suggest consulting your accountant to determine the correct posting accounts to use while creating the Journal Entry (JE).

 

In case you want to review the entries made, you can pull up or print a report for Journal Entries.

 

To do that:

  1. Go to the Search icon then choose Advanced Search.
  2. Filter your search to Journal Entries. Add additional filters such as Reference no., as necessary.
  3. Select Search, then choose the desired Journal Entry.
  4. Select More, then choose Transaction journal.
  5. To print, select the Print icon in the upper right of the report.

Be sure to get back to me if you have additional questions. It would be my pleasure to help. Have a good one!

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