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PEPU78
Level 1

Loan Accounts

Hi All

Please help.

I have three entities operating differently (say entity A, B and C). Each entity has its own Quickbooks account.

My challenge is as follows:

 

Entity 'A' settles most of the bills for 'B' and 'C' through its bank account. We post such payments to Loan Accounts for 'B' and 'C'. The problem is in B and C, the bills remain outstanding (reflect as unpaid).

Which transaction can be done in Entity B and C to record Loan from A and at the same time clear/settle the supplier bills (already paid by A)

 

Thank inn advance.

 

Solved
Best answer September 04, 2021

Best Answers
Rustler
Level 15

Loan Accounts

Because QB will not allow a liability account to be used to pay bills, you have to shuffle the funds

 

In the chart of accounts, create a cash type bank account and name it Clearing

 

1. Show a deposit in the Clearing bank account for the amount of the bill and use the loan liability account as the source account for the deposit

2. in pay bills, select the bill, set the account to pay from to the Clearing account, and pay the bill

 

Later when you pay back the loan enter the payment and use the loan liability account as the expense (reason) for the payment

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2 Comments 2
Rustler
Level 15

Loan Accounts

Because QB will not allow a liability account to be used to pay bills, you have to shuffle the funds

 

In the chart of accounts, create a cash type bank account and name it Clearing

 

1. Show a deposit in the Clearing bank account for the amount of the bill and use the loan liability account as the source account for the deposit

2. in pay bills, select the bill, set the account to pay from to the Clearing account, and pay the bill

 

Later when you pay back the loan enter the payment and use the loan liability account as the expense (reason) for the payment

PEPU78
Level 1

Loan Accounts

Before your response l tried posting a Journal entry to clear the bill and adjust the loan account and it seems to work. Not sure if anything else is affected but the Accounts payable balance is correct, the Supplier bill is paid and the loan account is credited with the same amount.

May you have a look at the Journal on the attached image:

 

 

Thanks again 

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