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How do i post a payoff on fixed asset with a lien paid off by third party

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QuickBooks Team

How do i post a payoff on fixed asset with a lien paid off by third party

Hi there, jadeeli2017.


Thanks for posting in the Community. I'm here to help you record a payoff with a lien from a third-party.


I'm happy to let you know that posting this in QuickBooks is quite simple. You just need to set up a clearing account and the third party as a vendor. Then, record the line as a deposit to the clearing account and create either a check or expense to post the payment.


To set up the Clearing Account

  1. Click Accounting in the left navigation menu, then select New.
  2. Choose Bank for the Account Type and Cash on hand for the Detail Type.
  3. Enter a name for the account.
  4. Click Save and Close.

To set up the third-party as a vendor

  1. Click Expenses in the left navigation menu, then go to the Vendors tab.
  2. Select New Vendor.
  3. Enter a name in the Company field.
  4. Click Save.


To record the deposit

  1. Click the Plus (+) icon.
  2. Select Bank Deposit.
  3. From the Account drop-down menu, choose the clearing account.
  4. Fill in the appropriate details on the following fields:
    - Received From: Enter the third-party that we entered as a vendor.
    - Account: Choose the appropriate account. If you're unsure, then I would recommend that you consult your accountant.
    - Amount: Enter the lien amount.
  5. Click Save and close.

To post the payoff

  1. Click the Plus (+) icon, then select Check.
  2. Choose the vendor (third-party) from the Payee drop-down menu and the clearing account from the Bank Account drop-down menu.
  3. Enter the Fixed Asset account in the Category field.
  4. In the Amount field, enter the lien amount.
  5. Click Save and close.


Just a heads up, this method can impact your books and you may wish to seek additional guidance from an accounting professional. Every business is unique and they can make suggestions on how to handle this. If you're not affiliated with one, our Intuit Find-A-ProAdvisor site can help you to find certified professionals in your area.


That should get you going in the right direction. Please let me know if there's anything else I can do for you. I always have your back and am always happy to help. Thanks for reaching out, wishing you and your business all the best.

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