Recording a partial invoice payment while the rest of the invoice amount goes towards a loan payable.

RYNT · ‎December 30, 2022

Hello. I need help. I have 2 businesses where we pay and invoice each other in house. So Business B took a loan from business A. Business B invoices A and receives payments for services monthly. As an example say the invoice is a total of $60,000. Business A writes a check for $40,000 to pay the invoice while the rest of the $20,000 goes towards the loan that B owes A. So that way we don't have to write multiple checks. Can someone please tell me how I would record this the correct way into Quickbooks DESKTOP?

Rainflurry · ‎December 30, 2022

@RYNT

Make two journal entries (Company > Make General Journal Entries)

1) In Co. A, debit Accounts Payable for $20K and credit the Note Receivable from Co. B for $20K. Make sure to put Co. B in the Name column on the A/P line of the journal entry. This reduces the note receivable from Co. B and creates a $20K credit that can be applied to the $60K bill from Co. B, leaving only $40K due.

2) In Co. B, debit the Loan Payable to Co. A for $20K and credit Accounts Receivable for $20K. Make sure to put Co. A in the Name column on the A/R line of the journal entry. This reduces the loan payable to Co. A and creates a $20K credit that can be applied as payment to the invoice.

Now, when you go to pay the bill in Co. A, you should have a $20K credit showing. Apply that to the bill and write a check for the remaining balance due of $40K. When you receive the payment in Co. B, you should have a $20K credit that can be applied to the invoice, along with the $40K check to total the amount due of $60K. You should also now show a balance of $40K on the note receivable in Co. A and a $40K balance on loan payable in Co. B.

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Rainflurry · ‎December 30, 2022

@RYNT

Make two journal entries (Company > Make General Journal Entries)

1) In Co. A, debit Accounts Payable for $20K and credit the Note Receivable from Co. B for $20K. Make sure to put Co. B in the Name column on the A/P line of the journal entry. This reduces the note receivable from Co. B and creates a $20K credit that can be applied to the $60K bill from Co. B, leaving only $40K due.

2) In Co. B, debit the Loan Payable to Co. A for $20K and credit Accounts Receivable for $20K. Make sure to put Co. A in the Name column on the A/R line of the journal entry. This reduces the loan payable to Co. A and creates a $20K credit that can be applied as payment to the invoice.

Now, when you go to pay the bill in Co. A, you should have a $20K credit showing. Apply that to the bill and write a check for the remaining balance due of $40K. When you receive the payment in Co. B, you should have a $20K credit that can be applied to the invoice, along with the $40K check to total the amount due of $60K. You should also now show a balance of $40K on the note receivable in Co. A and a $40K balance on loan payable in Co. B.

RYNT · ‎January 02, 2023

THANK YOU THANK YOU THANK YOU!!! That worked! That was exactly what I needed. I knew there was a way and I just was unsure how to do it. I truly appreciate your help! Thank you again.

RYNT · ‎January 02, 2023

THANK YOU THANK YOU THANK YOU! That was exactly what I needed! I knew there was a way from a previous job but I couldn't remember nor could I figure it out. I appreciate your response and help! Thanks again!

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Recording a partial invoice payment while the rest of the invoice amount goes towards a loan payable.