I started using the bill pay feature in QBO just recently. For all of the assets the company has acquired on credit thus far, I have done the following:
1) Set up the fixed asset and its contra asset account for depreciation
2) Set up the related long term liability.
In the past, as payments are made, I simply select the liability account, reducing the balance of the liability. At year's end I do a journal entry to book the interest by debiting interest expense and crediting the liability account.
So now, having begun to use the bill pay feature, I am concerned that if I enter a bill for the liability in order to pay it through QBO bill pay, it will do the following: 1) upon entering it, increase the liability, and 2) subsequently decrease the liability when I pay it, therefore creating a wash and not reducing the liability account.
How do I avoid this, or does QBO not increase the liability account when a bill for said liability account is entered?
Please help. Thank you all!!
