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heidi77f
Level 1

Guaranteed payments to previous owner

We bought a business and part of the agreement is to pay the previous owner payments over time.  I can set up the liability (payments owed) but what is the other side of the entry?

1 Comment
Joshua R
QuickBooks Team

Guaranteed payments to previous owner

Good afternoon, @heidi77f.

 

I'm happy to have you here in the Community. 

 

I can help you record the liability.

  1. Go to the Gear Icon in the top right and select Chart of Accounts.
  2. Choose New.
  3. From the Account Type drop-down, select Long Term LiabilitiesNote: If you plan to pay off the loan by the end of the year, choose Other Current Liability. Otherwise, choose Long Term Liabilities.
  4. From the Detail Type drop-down, click Notes Payable.
  5. Give the account a proper name, whatever is most comfortable for you. 
  6. Enter the loan amount as a negative amount in the Amount field. Since the future payments to the bank are a liability for your business, the amount should be negative.
  7. Select Save and close.

That's all there is to it. 

 

I'm right here if you have any other questions, all you need to do is reply to this thread.

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