How do we write off a loan made to an employee whose debt was discharged in Chapter 7?

RP20 · ‎April 20, 2020

We created a long-term asset account for the loan and credited previous payments by the employee/borrower to that account. We have a separate "bad debts" expense account, which we have used in connection with credit memos for deadbeat customers, but credit memo does not seem to apply to non customers. Thanks in advance.

R.P.

CharleneMaeF · ‎April 20, 2020

Good day, @RP20.

I'm here to help you with this.

To write off your loan or bad debt, you can use journal entry. However, I recommend consulting your accountant for guidance with the posting accounts.

You may follow the steps on how to create a journal entry.

Select + New.
Select Journal entry. Or, if you're in Business view, switch to Accountant view first. Then come back to these steps.
Fill out the fields to create your journal entry.
Select Save and close.

Feel free to visit our QuickBooks Live Bookkeeping to get a dedicated expert to guarantee all your records in QuickBooks are accurate and up to date.

Keep me posted if there's anything else you need from me. I'm here to offer more help for you.

View solution in original post

CharleneMaeF · ‎April 20, 2020

Good day, @RP20.

I'm here to help you with this.

To write off your loan or bad debt, you can use journal entry. However, I recommend consulting your accountant for guidance with the posting accounts.

You may follow the steps on how to create a journal entry.

Select + New.
Select Journal entry. Or, if you're in Business view, switch to Accountant view first. Then come back to these steps.
Fill out the fields to create your journal entry.
Select Save and close.

Feel free to visit our QuickBooks Live Bookkeeping to get a dedicated expert to guarantee all your records in QuickBooks are accurate and up to date.

Keep me posted if there's anything else you need from me. I'm here to offer more help for you.

RP20 · ‎April 20, 2020

Many thanks, Charlene.

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How do we write off a loan made to an employee whose debt was discharged in Chapter 7?