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Level 1

ppp Loan

Help, I am newer to Quickbooks and I am confused about the recording of our PPP loan. I opened up a Long Term Liability but did not give it a balance. The money is being deposited into our checking account from our bank. How do I record it into QB's? Do I do a deposit into our checking acct or do I deposit the money into the long term acct? Also, when paying our qualifying expenses, do I record the expense from our original "from" acct or does it come out of the long term acct. Hope this makes sense. Thanks for any help you can give!          

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Best answer May 06, 2020

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Community Champion

ppp Loan

You treat this like any other bank loan. The deposit into banking is from the loan liability. You were correct in creating the loan account without a beginning balance.

 

Short term would have worked if you were 110% certain it all would be forgiven but LTL is just fine.  Hopefully it will be zero on 12/31.

 

I have read the rules every which way and here is what I am doing.

 

Pay payroll and taxes just as normal. There is no reason I see to create a new payroll item or new checking account(unless you borrowed from a bank you never dealt with before and they required it)

 

It is payroll REPORTS and paid bills along with cancelled checks that prove how you spent the money. 

 

I have the luxury of extra accounts at my same bank to temporarily hold the funds but still use my operating account for all expense and move over just enough each pay period for allowable costs. There is absolutely no requirement to do so and is for my own intern accounting.

 

Remember also that whether quickbooks pays your taxes or you do, eftps.gov restricts one to a single source account for making payments and even with AB, you cannot change payroll processing account if you have ANY outstanding tax liability

 

 

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6 Comments
Highlighted
Community Champion

ppp Loan

You treat this like any other bank loan. The deposit into banking is from the loan liability. You were correct in creating the loan account without a beginning balance.

 

Short term would have worked if you were 110% certain it all would be forgiven but LTL is just fine.  Hopefully it will be zero on 12/31.

 

I have read the rules every which way and here is what I am doing.

 

Pay payroll and taxes just as normal. There is no reason I see to create a new payroll item or new checking account(unless you borrowed from a bank you never dealt with before and they required it)

 

It is payroll REPORTS and paid bills along with cancelled checks that prove how you spent the money. 

 

I have the luxury of extra accounts at my same bank to temporarily hold the funds but still use my operating account for all expense and move over just enough each pay period for allowable costs. There is absolutely no requirement to do so and is for my own intern accounting.

 

Remember also that whether quickbooks pays your taxes or you do, eftps.gov restricts one to a single source account for making payments and even with AB, you cannot change payroll processing account if you have ANY outstanding tax liability

 

 

View solution in original post

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Level 1

ppp Loan

Thanks so much for your help!

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Level 3

ppp Loan

Thank you for the details.

Could you please tell me how to record the interest  on PPP loan?

I received $56000 loan on my bank account and recorded as you said but later on I saw on the loan statement that there is an interest of $110 and makes total amount of $56110 🤦‍♀️. 

Thanks ...

 

 

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QuickBooks Team

ppp Loan

Hi there, @Vanna.

 

You can write a check and records the interest payment as a company expense. Let me guide you through the steps.

 

If you haven't yet, let's first create an expense account so you can track interest payments. Here's how:

 

  1. Go to the Lists menu, then select Chart of Accounts.
  2. In the Account drop-down, choose New.1.PNG
  3. Select Expense, then Continue.
  4. Enter the account name for the interest payments. (Example: Interest Expense)
  5. Click Save & Close.2.PNG

Once done, you can now write a check and record the interest payment along with the loan payment.

 

  1. Go to the Banking menu, then select Write Checks.
  2. Select the appropriate bank account from the drop-down.
  3. Choose the name of the vendor.
  4. In the Expenses tab, select the liability account for the loan and enter the principal amount.
  5. On the second line, select the interest expense account. Then enter the payment for the loan interest.
  6. Click Save & Close.3.PNG

I'm adding this article for more details: Manually track loans in QuickBooks Desktop.

 

You might also want to check out this fact sheet from the IRS to help you keep track of the PPP and what you need to know: IRS Paycheck Protection Program fact sheet.

 

Please keep in touch if there's anything else I can do to help you succeed with QuickBooks. I've got your back. Have a great day and stay safe.

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Level 3

ppp Loan

Thank you 

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Level 3

ppp Loan

Thank you, I appreciate your help.

But... this is about PPP Loan and interest, so I still didn’t start paying back, hoping all will be forgiven.

Should I wait for final statement about forgiveness and then record the interest or record it now and use Acc Interest payable? 

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