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My business partner borrowed $2000 from our business. He prepared salaries, and wrote his check less the amount that he owed the business, so the cash is in our main account. The amount borrowed was initially entered as a loan (other current assets). What entry to do I make to properly record this?
Hello, YLouis101.
Thank you for reaching out to the Community. To record a loan, you must set up a liability account for the loan and create a journal entry to record the loan, and then record all payments for the loan. You'll choose from creating an Other Current Liability (or Current Liabilities) if the loan is to be repaid within the current fiscal year, or a Long Term Liability (or non-current liabilities) if the loan will continue to be repaid after the current fiscal year.
Set up a the loan:
Then, record the part of the deposit and create a journal entry to record the loan.
In journal entries, the total of the Debit and Credit columns must be equal.
Lastly, record loan payments. You must record all payments made for the loan.
The set of steps I've shared is a general way on how to record loans in QuickBooks Online. But I still recommend contacting your accountant for further accounting-specific help.
If you don’t have an accountant available, you may visit our ProAdvisors page. You can contact one of our ProAdvisors and ask them for accounting advice.
I'm always here if you need more help. Have a great rest of the day!
Thanks for your reply @AileneA . The loan was taken from our business not a third party company. So he owed the business.
Hi, @YLouis101.
I’m here to ensure this loan will properly be recorded.
You can use the same current asset account. Then use the deposits to track the payments.
Here's how:
You can check out this article to help you reconcile your current asset account: Reconcile an account in QuickBooks Online
I want to make sure that your concerns are addressed, so feel free to let me know if you have any more questions. Have a good one!
@TirzahC Thanks for reaching out. We got paid from a job and that check was deposited in our account. He wrote his salary less of the amount he owed so technically there was no deposit by him. The money was already in the account because he never took it out. How do I show that the money was paid for the loan if its just in the account. What journal entry do I make??
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