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I will ensure you receive the appropriate guidance for recording a debit and credit transaction in the journal entry, kghorbani.
To add the loan charge to the liability account in the journal entry, debit $75 to an expense account and credit $75 to the liability account. It will balance the entries as the amount will offset to $0.
Moreover, I highly recommend seeking advice from your accountant regarding the appropriate debits and credits. This will help ensure they're accurately accounted for, particularly if the fee is separated or combined with the total. They can also assist you with which accounts to use.
I'm adding this resource for complete details when documenting the repayment process: Set up a loan in QuickBooks Online.
Here's a reference to learn the various reports with additional features for a closer examination of your business's finances: Run payroll reports.
Please comment below for more concerns about registering what you owe. I will be around to help you.
@JamaicaA RE: If you're referring to recording a loan repayment monthly, you can add another line for the fees when creating a check.
The question is simple: "How do I add monthly fees to a Liability Register?"
You didn't answer the question.
If the $75 is a fee, then you don't want it entered in the liability register because it will reduce your loan balance. A fee is an expense and should be recorded separate from the liability reduction (both debits in double-entry accounting). Is the $75 fee a separate transaction on your bank statement or is your total payment $983.37 ($908.34 + $75)? Is there interest also or does the $75 act as the interest? If the total payment is $983.37, enter two lines on your check:
Line 1 - select your loan payable account and enter $908.34
Line 2 - select your Interest Expense/Bank Fees expense account and enter $75.00
If interest is included in the $908.34, you will need to break out the principal and interest. Line 1 would be the principal amount and then you need an additional line entered for the Interest Expense portion.
I have attached a picture of the entries from the bank on my account. The $75 is an added amount that is put into the loan balance each payment month as a Fee/Interest. It is separate from the amount I pay each month and just adds to the balance.
Ahh, I see. I misunderstood. IMO, the best way to do this is to create a $0 bill for the vendor/lender. On line 1 enter the expense account for the fee/interest for $75. On line 2, enter the loan payable account and enter -$75.00. The bill will automatically show as paid because it's $0. The loan payable balance will increase by $75 and the fee will be booked to your fee/interest expense account. You can do this with a journal entry too but a bill will show under the vendor/lender whereas a journal entry won't.
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