Question

Opening balance equity

Forum|Forum|6 years ago
July 21, 2020
12 replies
106 views

Someone created a loan in my company's QBO account by Crediting the Loan/liability and Debiting Opening Balance Equity. The Loan acct shows this as the first transaction and showed it as Reconciled. This is a loan we owe but money was never deposited into a bank account. The Loan acct will not let me enter an opening balance since it is already established. This is not part of the opening equity. How do I fix this to show opening equity zero and the loan beginning balance as $30,000?

QuickBooks Online

R

ReymondO

Moderator

I'll help you fix the beginning balance of your loan account in QuickBooks Online (QBO), @parksbarbie.

Before that, let me share some insights on how the Opening Balance Equity is used in the program. This account is the offsetting entry used when entering account balances into the Quickbooks accounting software. This account is needed when there are prior account balances that are initially being set up in Quickbooks.

Therefore, when dealing with another current liability account, such as any loan, a credit entry to the account will decrease its balance. This will also apply to any asset account when entering its opening beginning balance in the opposite way.

We can only zero out the Opening Balance Equity if all accounts doesn't have any beginning balance when they were created.

However, we can correct the opening balance in the Loan/Liability account by deleting the journal entry that affects it. Just follow these steps:

Go to Reports and search the Journal report.
Click the transaction to open, then select More.
Choose Delete and click OK.

Once done, you can now go back to this account and manually enter its opening balance. Here's how:

Go to the Accounting menu and select Chart of Accounts.
Look for the Loan/Liability account, then click the drop-down arrow under the ACTION column and choose Edit.
Enter the beginning balance in this account and select Save and Close.

In addition, I've included an article on what to do if you've been tracking transactions in QuickBooks for a while but didn't enter any opening balance on your accounts: What to do if you didn't enter an opening balance in QuickBooks Online.

If you have any other questions please let me know. I'm always glad to help any way I can.

P

parksbarbieAuthor

I deleted the journal entry and when I go back to the liability/loan account in the chart of accts and hit edit there is NO OPTION for an opening balance? How do I enter that now?

Barbie

C

christyannesia

Hi there, @parksbarbie.

I'm glad to share with you the other way to edit the opening balance of your liability account in QuickBooks Online (QBO).

Here's how:

Go to the Accounting menu and select Chart of Accounts.
Look for your liability account and click the View register button.
Click the balance and choose Edit.
You'll be routed to the Journal Entry page and from there you can edit the opening balance.
Hit Save when done (see screenshots for reference).

For more information, please refer to this article: Edit an incorrect opening balance.

Also, if in case you want to break down your expenses, income, and other transactions to make your accounts organized. You may visit this link for the detailed steps: Create subaccounts in your chart of accounts in QuickBooks Online.

Keep me posted if you have any other QuickBooks concerns. I'll be here to help. Have a great day ahead.

I have the same situation with @parksbarbie. Now, if I do what you are suggesting, the opening balance in COA will change again.

T

Tiamia

What about this scenario: not quite sure how to enter it.

Expense of equipment: 5,770.00 paid on my personal credit card

Partner sends money from her personal LOC to pay it off…

we owe her personal Line of Credit 5770.00.

I’m in a query here… where this is a loan to the company but is her personal LOC holding the debt?

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