I feel such a dunce. I am a small business owner so not an accountant. I am trying to accurately record my PPP loan in the chart of accounts so to accurately track so I can apply for forgiveness.
The loan initially funded to my business checking account. I then transferred it to a new bank account I set up so to keep it separate for tracking & reconcile.
My issue is when I try to accurately reflect the course these funds took through my business it is screwing around with the liability. Here is what I did.
I deposited the funds in my business account via the banking deposit window as per another board answer about how to set up PPP loan in QB. I selected the liability account as where the money was from. It then shows correctly as an increase in the liability account I set up for PPP.
However when I then go in to my business account & enter the bank transfer so to accurately show the funds leaving that account for reconcile purposes for & show the destination as the liability account, it cancels out the deposit & takes me back to zero liability for the PPP loan.
I feel I need to show the funds leaving my business account & going to the separate account for reconcile purposes but I am clearly being stupid & I don't know how to do this correctly.
I hope you're having a beautiful day. Allow me to explain what's happening when you create the bank transfer and how to fix it.
Based on the information you provided, the reason your bank transfer is zeroing out your liability account is due to you moving the money from your bank account to the liability account. This means you're showing the money as paying off the liability when you should be transferring the money to the bank account you set up specifically for the loan. I've included steps below to show you how to transfer the funds to your loan account:
Go to the Banking menu and choose Transfer Funds.
Enter the correct date in the Date field.
In the Transfer Funds, select the bank account the funds are coming out of from the drop-down box.
From the Transfer Funds To drop-down list, pick the bank account the funds are being deposited into.
Enter the amount in the Transfer Amount field.
Click Save and Close.
Now your funds are recorded correctly, and the liability isn't zeroed out. You can check out this article on banking concepts for more information.
Feel free to comment below if you have any other questions. Enjoy the rest of your day!