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Write off customer and vendor balances

I'm trying to write off a bad non-customer loan, and can't find the complete set of steps for Quickbooks Desktop Pro 2018.  The loan is set up as a current asset, and the lendee declared bankruptcy, so I need to write off the asset.  I created a Bad Debt expense account, then I created a non-inventory Bad Debt product/service item linked to the Bad Debt Expense account.  Then I created a credit memo but can't figure out how to apply it to an asset account.  This is a non-cash transaction, I want to expense the entire amount of the loan but there isn't any sort of invoice associated--the loan was made to a non-customer.

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Best answer March 08, 2019

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Anonymous
Not applicable

Write off customer and vendor balances

You went thru the steps that would be used for a customer AR write off. But if the borrower does not have a 'customer name' then you have to do it outside of the AR system - probably just a JE from the asset to the BadDebt expense.
There might be tax question as to whether this an operating loss, investment loss, or a capital loss - depends on what the loan was for.

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1 Comment 1
Highlighted
Anonymous
Not applicable

Write off customer and vendor balances

You went thru the steps that would be used for a customer AR write off. But if the borrower does not have a 'customer name' then you have to do it outside of the AR system - probably just a JE from the asset to the BadDebt expense.
There might be tax question as to whether this an operating loss, investment loss, or a capital loss - depends on what the loan was for.

View solution in original post

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