I have a client that loaned his company money. I debited the bank account and credited the long term liability account. Now every month interest needs to be accrued. How do I do that? Now we paid him back $5000 and I need to know how to book that. I know part of it is principle and part of it is interest.
Let me address your concern with recording long-term loans in QuickBooks Online, mrswagg.
The Long Term Liability account is not automatically set up in Quickbooks Online (QBO). You'll need to manually create in the Chart of Accounts to track loaned amounts depending on how long you'll pay them. You can record long-term receivables from your customers by following these steps:
Go to the Gear Icon.
Under Your Company, choose Chart of Accounts.
Click on New.
In the Account Type drop-down, select Long Term Liabilities.
Under Detail Type, choose Notes payable.
Then, fill out the information in the Name, Description, and Unpaid balance as of fields.
Click Save and close.
Create a journal entry to record the money you got from the loan
1. Select +New.
2.Under Others, choose Journal Entry.
3. On the first line, select the liability account you just created from the Account dropdown. Enter the loan amount in the Credits column.
4. On the second line, select your bank account from the Account dropdown. Enter the same loan amount in the Debits column.