We have an SBA loan and the SBA made 3 payments on our behalf, reducing the principle of the loan. How do i record these 3rd party payments in our QB file, so our loan amount reconciles with the end of year statement?
I've got the steps you'll need on how to record your loan payments, @BluebirdBookkeeping.
To track your SBA loan, make sure you've set up a liability and expense account for the loan and interest payments, respectively. Then, deposit the loan amount using the liability account. I'm including the steps below on how to record the amount:
After that, you can record loan payments by following these steps:
We also have an awesome guide about this process: Manually track loans in QuickBooks Desktop.
Please come back if you need more help with tracking your loan payments in QuickBooks Desktop. I'm always available here to help.
Thank you for responding, however this does not answer my question. I know how to record payments made to loans, when they are coming from our accounts, however three payments were made by a 3rd party. These payments did not affect our deposit accounts, as we did not make them, yet they did reduce the loan principal. How is this best adjusted in Quickbooks?
Thank you for getting back to us. I have steps to help you adjust the payment reduction in the loan principal in QuickBooks. Let's create a clearing account. This way, you can move money from one account to another account. This account normally has a balance of $0.00 because you always take out the same amount that you put in. It may also be called a Barter or Wash Account.
To set up a clearing account:
Click New from the Account drop-down list at the bottom.
In the Add New Account window, select the Bank radio button.
Below are the reason why you need to choose bank account:
4. Click Continue.
5. From the Account Name field, enter Clearing Account.
6. Take note that do NOT enter an opening balance.
7. Hit Save and close.
To use a clearing account:
Here's an additional reference about this type of account: Set up a Clearing Account.
I also suggest consulting an accountant to make sure the recording is accurate. You can as well ask for further guidance regarding the categorization of the accounts.
Please know that you're always welcome to post if you have any other concerns. Wishing you and your business continued success.
First, create an 'other income' account called SBA Debt Relief (or whatever is most appropriate in your case). Then, make a journal entry for each payment:
|SBA Debt Relief||XXX|
That will put the SBA Debt Relief payments into other income on your P&L. Those payments are non-taxable as you probably know.