Bank feed set up for new loan

Hi there, Farm10.

To add a new loan and its associated fees in QuickBooks Online (QBO) without duplicating transactions, you can create a check or create a Journal Entry to accurately record the full loan amount, the fee expense, and the net deposit.

The reason why we need to create a Journal Entry is that the bank feed only shows the $50k net deposit that actually hit your bank account, but your liability needs to reflect the full $55k you owe the lender. It captures the complete transaction. The $55k borrowed, the $5k in fees that were deducted, and reconcile it with the $50k cash you received.

Yes, we can add loan fees to Long-Term Liability by creating a check and categorizing the fees under Loan Payable. This ensures accurate accounting for the fees without duplicating bank feed transactions.

If you haven't set up a loan in QuickBooks Online, refer to this article: Set up a loan in QuickBooks Online.

For best assistance, I recommend consulting with your accountant to ensure the loan and associated fees are recorded accurately and comply with accounting standards.

If you have any additional concerns, please share them with us.

Hi JeveeAdvin la,

Should opening balance be 0

or 55,000? It is a new loan. I can assign bank feed transaction to new long term liability (easiest method), but I still need add opening balance and fees. 

Hello there, @FARM 10. Yes, if this is a new loan deposited into your bank account, the opening balance should be $0.

Before proceeding with the steps below, I recommend consulting your accountant, as this may impact your financial records. If you haven’t yet created an account for the loan, follow these steps:

1. Go to the Accounting menu and select Chart of Accounts.
2. Select New to create a new account.
3. From the Account Type dropdown:

• If you aren’t paying off this loan within the fiscal year, create a Long Term Liabilities account with the Notes Payable detail type.
• If you’re paying off this loan by the end of the fiscal year, create an Other Current Liabilities account with the Loan Payable detail type.

       4. Give the account a relevant name, like "Loan for a car" or "Covid-19 relief loan."

To add a beginning balance, here’s how:

1. In the loan account, enter the loan's Opening Balance and the starting date for tracking.
2. If this is a new loan that has just been deposited into your bank account, leave the Opening Balance as US $0.
3. For loans that have already been partially paid, enter the account balance as of your desired tracking date. You'll also need to create an additional journal entry to record the deposit.
4. Click Save.

For your reference in setting it up, check this article: Set up a loan in QBO.

Regarding your second question about handling the journal entry and matching it with the deposit, could you clarify what you mean? If you're referring to matching the deposit and journal entry, check this article: Match your bank and credit card transactions.

However, if you’re referring to creating a journal entry for the deposit when you’ve added a loan with a balance other than $0 and your bank feed displays the loan deposit amount, you’ll need to record the deposit with an additional journal entry. Here’s how:

1. Select + New and choose Journal Entry.
2. In the Account field, select the liability account. Enter the loan’s opening balance amount in the Debit column to reduce the balance.
3. Select Opening Balance Equity as the account and input the same amount in the Credit column to balance the transaction in your chart of accounts.
   • Check the amounts. You should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are balanced.
4. Add a note or reason for creating the journal entry in the Memo section.
5. Click Save and Close.

I’ll add this article when you start reconciling your accounts, so they always match your bank and credit card statements: Reconcile an account in QBO.

We’re always here to help you if you have any other concerns.