Line of Credit vs Credit Card Accounts

BlueJs · ‎February 17, 2020

We have a Wells Fargo account that I set up several years back as a Line of Credit, but it actually functions as a credit card, and I do have a physical card. (I do not have a checking account there.)

I thought to change it to a credit card account in QBO as effective 1/1/2020, but have not yet actually made the change. Wells Fargo bills on the 24th of every month, and we have been using a QBO transfer to make the payment from our business checking acct to the Wells Fargo Line of Credit account I set up in QBO.

Then a second QBO transaction is posted to enter the interest charged for that month which is always an earlier date than we make the payment. Still, the account is only virtually an LOC account in QBO. In fact, it is a credit card account whereby we use the card to draw funding (handled as a cash advance).

It seems that it should be in QBO as a credit card, but making a payment that includes interest on one QBO transaction does not allow us to show the interest charged (accrual basis) on a different date than the payment to the principal balance. Is it only possible to handle the 2 different dates for interest and principal if we set up as LOCs? Thanks for help with this.

Rustler · ‎February 17, 2020

I always set up an LOC as a credit card type account.

Like most all credit cards, interest is charged per billing cycle, so when I get the bill, I reconcile and on that reconcile screen there is a block to enter interest charged, recon and then make the payment. This way the interest charged is as of the recon date, then your payment can be made later if desired

you could if you want, though I see no reason to, make a credit card charge as of a certain date using the interest paid expense account and the amount, then reconcile.

View solution in original post

Rustler · ‎February 17, 2020

I always set up an LOC as a credit card type account.

Like most all credit cards, interest is charged per billing cycle, so when I get the bill, I reconcile and on that reconcile screen there is a block to enter interest charged, recon and then make the payment. This way the interest charged is as of the recon date, then your payment can be made later if desired

you could if you want, though I see no reason to, make a credit card charge as of a certain date using the interest paid expense account and the amount, then reconcile.

BlueJs · ‎February 19, 2020

Thanks.

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Line of Credit vs Credit Card Accounts