Question

Loan Payable

Forum|Forum|4 years ago
May 13, 2022
1 reply
30 views

Hello,

I have a Loan recorded as "Loan Payable" through a Journal Entry. However, when I am reconciling the bank account, the deposits that came in for this loan are showing up as needing to be reconciled. Do I need to also record the deposit in QuickBooks? If not, is the Loan Payable automatically increasing my cash or how does this reflect? Do I do anything with the reconciling item from the bank, do i exclude it?

Additionally, a part of our loan was considered due to payments made on our behalf through a Credit Card. Should I record those payments to the vendors as well and record the CC it came from? Otherwise, how would I record the amount that was given to us through a loan for a specific vendor?

Rainflurry

Level 11

@aleksandras2

If you are receiving deposits on a loan you made, it is not a loan payable, it is a note receivable. Make sure you have a note receivable asset account set up. The journal entry to record the loan would be to debit note receivable and credit cash for the amount of the loan.

When you download the bank transactions, you can add them or match them if you have entered them already, or exclude them. You need to split the payment between the note receivable asset account (principal portion of the payment) and interest income account (interest portion of the payment). This will increase your cash balance, reduce the note receivable balance, and book interest income.

I'm not sure I understand the last part. Can you explain in more detail? Did you loan money to a vendor and fund the loan with a credit card charge?

A

aleksandras2Author

Yes, the first answer helps so much, thank you!

On the second part, I have an invoice from a vendor, and the individual we have the loan from made a payment on their credit card (I already have this entered in the loan payable). The only way for me to identify how much of a credit that I have floating for this vendor, I recorded this as "bill payment" and recorded the full amount of the credit card payment. Is that correct?

Rainflurry

Level 11

@aleksandras2

Ideally, you would not have used a journal entry to record the bill payment. You would record the bill payment coming from a bank clearing account. If you don't have one, set up a bank account in QB called 'clearing account'. Then, after you have recorded the bill payment coming from the bank clearing account, create a journal entry - debit the bank clearing account and credit the loan payable. This will put the bill payment into the loan and keep your vendor balance accurate.

If you already entered that bill payment into the loan payable, what journal entry did you use?

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