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Ralphthefluffycat
Level 2

How to enter a loan with a fee added on top of it?

I'm trying to record a loan received along with a fee and am not sure how to enter this in QBO.

 

The loan is $10,000, and there's a fee of $100 on top of it. This fee is part of the amount due but not included in the loan itself. So I have $10,100 showing as a long term liability. The $10,000 loan got deposited into the checking account. I record this as a transfer, right?

 

How do I account for the $100 fee added to the loan? This is not a fee due up front but, rather, it is included in the amount due but not included in the loan itself.

 

Thanks!

4 Comments
john-pero
Community Champion

How to enter a loan with a fee added on top of it?

The deposit is recorded as a Deposit. Two lines. Loan amount 10,100. Fee, negative 100. Net deposit 10,000. Transfers are for movement between like accounts such as checking to saving or bank to bank and a loan is not a transfer but an increased liability in exchange for an increased asset (larger bank balancecor added purchase)

Ralphthefluffycat
Level 2

How to enter a loan with a fee added on top of it?

Thank you so much for your reply!

 

Under 'account,' do I choose the long term liability account for both the 10,100 and the -100?

Eugene Shestakov
Level 3

How to enter a loan with a fee added on top of it?

Hey, I would record it in the following manner: open-up the 10k deposit transaction and set the account to long term liability if this won't be paid back within one year, name it (the name of issuer/ bank & last 4 of acc#). This will give you a 10k deposit & a 10k liability.  For the $100 fee, make a JE debit bank fees expense acc - credit the 10k liability acc and you should end up with 10k of cash in the bank, $100 loan fee expense on P&L and a $10,100 loan liability on the balance sheet.  

Ralphthefluffycat
Level 2

How to enter a loan with a fee added on top of it?

Thanks so much for your reply!

 

 The problem is I don’t want it to show up on the p&l because it’s not a fee that is actually being paid right now. No money is being taken from the accounts to pay for it, it’s just kind of sitting on top of that loan, which is why I’m not sure really how to categorize it. 

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