We loaned money to a customer, they will be repaying with interest - How to I record the principle and interest amount?

Glad to see you here in the Community, @LindaKP1023.

I'd be glad to help you record the principle and interest amount in QuickBooks Desktop (QBDT).

The first step to recording a loan for a customer is to determine the purpose of the loan:

• Are you going to use the loan to close all open invoices?
• Is the loan intended for other purposes (regardless of whether or not it is a customer) and you intend to write a check?

If the loan's purpose is to cover open invoices, you'll need to:

1. Create an account to track the loan and its repayment.
2. Then, enter a journal entry.

If the loan is for a different purpose:

1. Create an account to track the loan and its repayment.
2. Issue a check for the loan.
3. Record customer payments.

I've also added this article about the loan manager in QBDT: QuickBooks Loan Manager. It will help you calculate interest and payment schedules.

Let me know how it goes by dropping a comment below. I'm always here to help. Take care!

We loaned an employee funds to purchase a home. She will be making monthly payments. There is the principle amount and interest will be assessed. What is the best way to record it?

There are no open invoices, we wrote check to pay off the employee debt. I did create an account for the loan. when she pays i will record it to the account but should i create an account for the interest? will it be an asset other asset?