Warm greetings ATestaPBC, I hope you are doing well. I have the information you need about recording loan repayments.
To record a loan from the company's owner or officer, you must first create a liability account for the loan, and then create a journal entry to record the loan. Finally, you need to record all payments for the loan.
The account type you choose depends on the repayment time frame. You can select Other Current Liabilities if the loan will be paid in full within a year, or Long Term Liabilities if it will take more than a year.
To create a liability account for the loan, follow these steps:
- Go to Settings and select Chart of Accounts.
- Click on New.
- Choose either Other Current Liabilities or Long Term Liabilities from the Account Type drop-down list, depending on the loan type and repayment time frame.
- Select either Other Current Liabilities or Long Term Liabilities from the Detail Type dropdown list.
- Enter a Name for the account, for example, Loan from Officer/Owner.
- Leave the Unpaid Balance field blank.
- Click on Save and close.
Next, create a journal entry for the loan by following these steps:
- Select + New.
- Choose Journal Entry from the Other option.
- Enter the loan amount and log the appropriate amounts to the relevant expense accounts. For example, credit the Liability/Loan account and debit the appropriate expense accounts.
- Click on Save and close.
Finally, record payments made on the loan by following these steps:
- Select + New.
- Choose Check from the Vendors option.
- From the Account dropdown list, choose the liability account you created for the loan.
- Enter the payment Amount.
- Click on Save and close.
Keep in mind, that if you are unsure which liability account to use, it is best to consult your accountant.
Also, you can check the following articles to help you track what you've entered inside your company file:
I hope this information helps you with tracking loan repayments inside QuickBooks. Don't hesitate to contact us again if you need further assistance. Stay safe!
