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cltrn1
Level 1

LOANS

How do I ener a loan pay off that someone else paid but no money crossed my hands or my bank account

6 Comments
RenjolynC
QuickBooks Team

LOANS

I'd like to share some steps, cltrn1.

 

You can record the loan pay off as a deposit. Note: Make sure you have an account created for the loan. If not, you can add it as Other Current Liabilities, or Long Term Liabilities depending on the type of your loan.

 

Then, create an expense or check to record the payment. Before doing so, you'll want to create a clearing account to assign the payment temporarily and move the money to another account later on. 

 

Here are the steps:  

  1. Go to Accounting > Chart of Accounts.
  2. Select New.
  3. Choose Bank from the Account Type drop-down.
  4. In the Name field, you can enter Clearing or Wash account.
  5. Click Save and Close.

Once done, create the deposit by following these steps:

 

  1. Go to + New > Bank deposit.
  2. Select the clearing account you created from the Account drop-down.
  3. Under Add funds to this deposit, choose the liability account and enter the loan amount.
  4. Click Save and close.

Finally, record a check or expense and make sure to use the clearing account from the Bank Account drop-down. Then, select the liability under the Category details column.

 

I'd still recommend reaching out to your accountant for any accounting advice.

 

Please let me know if there's anything else you need. I'll be around to help you some more. Take care and stay safe.

Samya
Level 1

LOANS

Hi, the SBA is currently making payments on our business mortgage. So they sending the money directly to the mortgage account. We don't get the money. How can we record the decrease in our mortgage in this case? If I add money to the clearing account, how can get the balance back to 0? (Quickbooks Desktop Premier 2019)

Anna S
QuickBooks Team

LOANS

Hello, @Samya.

 

I hope all is well. You can set up a mortgage payment in QuickBooks Desktop to show the principal, interest, and escrow payments from the SBA. The QuickBooks Loan Manager will also help you calculate interest and payment schedules. This feature also lets you track your new and existing loans, make repayments, and run different "what-if" scenarios to compare the different loan options. I've included articles to both options below for you to choose from:

 

 

I highly recommend reaching out to your accountant for any specifics on recording your mortgage. They know the details of your account and can guide you in the best direction.

 

Feel free to post below if you have any other QuickBooks related questions. Take care!

Samya
Level 1

LOANS

Thanks. The loan is already set up in there but it doesn't help post any payment an outside source makes to it. I can only post a payment from my own payment accounts which is normally the checking account. Since all transactions have a debit and a credit, where does the debit come from? Normally it is debit checking, credit mortgage.

ReyJohn_D
Moderator

LOANS

Thanks for the additional details, @Samya.

 

You can create a Journal Entry (JE) for your Mortgage to the Loan Liability in QuickBooks Desktop (QBDT). You'll have to debit Mortgage and credit Liability. This will increase your liability as a loaned money. Here's how:

 

  1. Go to the Company menu then select Make General Journal Entries.
  2. Enter the accounts. Debit Mortgage and credit Liability.
  3. Hit Save and Close once done.

 

Also, I highly suggest reaching out to your accountant for the best advice on what accounts to use in recording your mortgage. 

 

You may also consider checking out this article about QuickBooks Loan Manager. It contains steps that will help you calculate interest and payment schedules. This way, you can track and manage your new and existing loans, make repayments, and run different “what-if” scenarios to compare different loan options: Things to learn about QBDT Loan Manager.

 

Fill me in if you have more questions about managing your loans in QBDT. I'd be delighted to help you some more. Take care and have a nice day.

Samya
Level 1

LOANS

Thank you for your reply. Maybe I can't bring across my question in the correct way. The money used to pay the mortgage is not a loan so not a liability from the SBA, they just pay our mortgage for the next 6 months. No money crosses our hands. How can I account for the money they give us. We don't see the money, they just automatically send payment to our mortgage company. When I record the payment I have to choose an account the payment comes from, how can I do that? The money must come from somewhere but it can't be from any of our accounts. Do I register the SBA as a vendor and receive payments from them? But it shouldn't be conted as income. 

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