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Level 1

How to enter transaction in Liability Account

How to record interest paid into and out of a Liability Account
3 Comments
QuickBooks Team

How to enter transaction in Liability Account

It’s nice to see you in the Community, gregveachlaw.


Let’s write a check to record the interest paid into and out of a liability account. The process is a breeze, and I’m here to guide you.


If you haven’t created the liability or expense account, go to the Chart of Accounts page to add them. I suggest consulting an account for a recommendation on the specific accounts to use to track the transaction.


To add the account, we’ll have to perform the process one at a time. Check out the steps below.

 

  1. Tap the Accounting menu on the left panel to choose Chart of Accounts.
  2. Hit the New button in the upper right to open the Account window.
  3. Press the Account Type drop-down and pick Other Current Liabilities or Long Term Liabilities.
  4. Select the appropriate category in the Detail Type drop-down.
  5. Enter a name for the account.
  6. Click Save and close.liab8.png liab8.png

Follow the same process when setting up for the expense account. Then, pick the correct Account and Detail Types. Let me share this article for additional information: Add an account to your chart of accounts in QuickBooks Online


When you’re ready, let’s go ahead and record the transaction. Here’s how:

 

  1. Click the New menu in the upper left to choose Check under Vendors.
  2. Fill in the field boxes with the correct details.
  3. Go to the Category details section and enter the following information.
        First line: Liability account for the loan and the amount of payment
        Second Line: Expense account for the interest.
  4. Press Save and close.

For future reference, I’m adding a guide that outlines the instructions of how to: Set up a loan in QuickBooks Online.


Stay in touch if you have any other concerns or additional questions about the product. I’ll be glad to help and answer them for you. Enjoy the rest of the day.

QuickBooks Team

How to enter transaction in Liability Account

Greetings, gregveachlaw.


I'm back to make sure the information I shared answered your question? If you have any clarifications recording interest or the process, click the Reply button and post a comment.

 

I’ll be glad to lend a helping hand. Enjoy your day.

Level 11

How to enter transaction in Liability Account


@gregveachlaw wrote:
How to record interest paid into and out of a Liability Account

@gregveachlaw 

 

If you have recorded liability payments that also include principal and interest in a liability account and now like to separate interest expense from this account you can write a journal entry.

 

From the left dashboard > + New > Other > Journal Entry

Debit = Interest Expense

Credit = Liablity Account

 

This will show interest expense and principal portion as a liability account.

 

Hope this is what you're trying to do it!

 

 

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