Recording a mortgage I gave to someone who bought a home from me

I recognize the importance of efficiently recording mortgages for you, and I value your initiative in sharing it here, I will make sure you can do this seamlessly in QuickBooks Online (QBO).

First, you need to set up a dedicated account to track loan payments and interest earned. Here's how:

1. From the Gear icon, go to the Chart of Accounts.
2. Select the New tab. and you choose any account and detail type, then Save.

Then create non-inventory/service items for the loan and interest, then assign those income accounts with two items.

1. Go to Products Services, and select the Non-inventory item.
2. Create for loan item and loan interest item, then Save and close.

You can create your customer an invoice and put in the invoice the two items you created, then receive payment if your customer is going to pay.

It's important to note that QuickBooks does not automatically calculate interest.  However, you can manually calculate it by multiplying the loan balance by the interest percentage, then divide by 12 for monthly interest.  For further assistance, you can contact your accountant.

For additional details, you can read these articles to learn how to record, track, and use loans in QBO:

•  Track customer loans in QuickBooks Online.
• Change product and service item types in QuickBooks Online
• Set up a loan in QuickBooks Online

Additionally, check out these links for guidance on categorizing your transactions and reconciling your account seamlessly: 

• Categorize and match online bank transactions in QuickBooks Online.
• Reconcile an account in QuickBooks Online.

Keep me updated on your progress in recording your mortgage so I can provide additional support. I'm here to help you.

Thank you for your response. Sorry that I wasn't clear. Let me explain again.

This is not a liability to my company. It is a note receivable.

I own the home. I do NOT have a mortgage on the home, it is owned outright.

I am selling the home to someone else and carrying the loan for the BUYER. It is an asset to my company, specifically a note receivable.

I would like the calculate the interest EARNED from this loan each month, invoice the buyer for the mortgage payment, and apply the payment appropriately to both principal and interest.

Does that make sense?

I appreciate you for coming back to this thread, ProSapien. I can help you record the loan each month and how to record the mortgage payment in your QuickBooks Online (QBO)  account.

In QBO, you can keep track of loans and record payments such as mortgages. In your case, you can set up two dedicated accounts for loan payments and interest earned to your COA.

Once done setting up a new account, proceed in creating non-inventory/service items for the loan and interest, then assign those income accounts to the two items.

Here's how:

1. Go to Sales, then select Products & services.
2. Click the New button, then choose Non-inventory or Service.
3. You can enter any name of the items.
4. Under Income account, select the account you've set up in your COA.
5. Enter the necessary information, then click Save and close.
6. Repeat the steps for the second item.

I've added a couple of screenshot for you visual reference.

After that, you can send an invoice to your customer, and enter the two items you've recently created. Once the payment is sent, you can record it to mark the invoice as paid.

I still recommend seeking advice from your accountant for other options. They can also assist you in selecting the correct account or category for the loan payment and interest earned. If you don't have one, you can find a professional through this link: https://quickbooks.intuit.com/find-an-accountant/

Moreover, I suggest making the invoice recurring so that you do not have to process it manually. This feature will automatically create an invoice depending on what schedule you've entered.

In addition, you can refer to this article to learn how to personalize your sales forms in QBO: Customize invoices, estimates, and sales receipts in QBO.

Feel free to comment on this post if you're still concerned about recording your mortgages in QBO. I'm always available to help you.