How do I CORRECT my enter my land in quickbooks?

Johnfv15 · ‎September 23, 2022

Non-Profit Corp.

Purchased land (soccer fields), with bank - trustee loan.

I entered the purchase as: Account/Type = Fixed Asset.
I also set up an account =Long Term Liability

I pay the bank quarterly, $10K. ($40K yearly)
The payment is recorded as an EXPENSE. (Which may be incorrect as it makes no adjustment to my liability for the land, nor does it adjust the value of the asset.)

I use CLASS as cost centers.

The CPA has me enter an end of year journal entry of: (File attached)

ACCOUNT DEBIT CREDIT MEMO NAME CLASS

Mortage Land 40,000 To Adj Mortage Bal FIELD

Expense Field Payment 40,000 To Adj Mortage Bal FIELD FIELD

Problem is - this journal entry INCREASES my P&L profit by $40,000.

I can understand my liability going down $40K and my asset increasing by the same amount.

But paying a $40K expense increases my profit.

How do I fix this, even if I have to adjust my 990-tax filing?

BigRedConsulting · ‎September 23, 2022

Payments on the loan should use the loan account - presumably the Long Term Liability account. Enter the loan account on the checks' "Expenses" tab (which accepts various types of accounts besides expense accounts.) Do this on any new payments and also edit the existing payments and change the account.

Then, record the monthly (or other period) interest expense in the loan account's register as an increase to the account balance. Once complete, the loan account balance should match your loan statement.

I don't know why you'd need any extra journal entries to track a loan. I don't think you do. Instead, enter the details directly in the loan account register (except for payments which are entered as checks) to match any fees from your account statement and you should be done.

ZackE · ‎September 23, 2022

Thanks for reaching out to the Community, Johnfv15.

To properly identify how you can correct your journal entry which is increasing business profits, I'd recommend working with an accounting professional. If you're in need of one, there's an awesome tool on our website called Find an Accountant. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

Here's how it works:

Go to our Find a ProAdvisor page.
Use the City or ZIP search field to specify a location.
Select Find a ProAdvisor.
Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.

Once you've found an accountant, they can be contacted through their Send a message form:

Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
Enter your appropriate info in the Your name, Your email, and Your phone number (optional) fields.
Hit Send message.

You'll also be able to find many detailed resources about using QuickBooks in our help article archives.

If there's any additional questions, I'm just a post away. Have an awesome Friday!

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How do I CORRECT my enter my land in quickbooks?

How do I CORRECT my enter my land in quickbooks?

How do I CORRECT my enter my land in quickbooks?

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