How to convert unpaid bills into a loan?

I've got the steps to set up loans and track them in QuickBooks Desktop, dairydetippe.

First, create and set up a liability account to record the loan. Let me show you how:

1. From the Lists menu, select Chart of Accounts.
2. Right-click anywhere, then click New.
3. Choose Other Account Types, then Long Term Liability.
4. Click on Continue.
5. Enter the account name, then Save & Close.

Once done, create a new vendor for the bank or company you need to pay the loan, then set up an expense account to track the interest payments.

To set up vendor (Bank/lending company):

1. Go to the Vendors menu, then Vendor Center.
2. Select New Vendor.
3. Enter the name of the bank or the company you need to pay for the loan.
4. Click OK.

To set up an expense account:

1. Go to the Lists menu, then choose Chart of Accounts.
2. Right-click anywhere, and select New.
3. Choose Expense, then Continue.
4. Enter the account name for the interest payments.
5. Select Save & Close.

Lastly, record the loan amount. Here are the steps:

1. From the Banking menu, select Make Deposits.
2. If the Payments to Deposit window opens, select Cancel.
3. In the Make Deposits window:
   1. In the Deposit To field, choose the account to deposit the loan into.
   2. Check the Date and enter an optional Memo.
   3. In the From Account column, select the Liability account you created in Step 1.
   4. In the Amount column, enter the loan amount.
   5. Click on Save & Close.

For more guidance, check out this article: Manually track loans in QuickBooks Desktop.

You can also track your loan with the help of the Loan Manager in QuickBooks Desktop. This article will guide you through the process: QuickBooks Loan Manager.

I would also recommend checking with your accountant to verify the action you've taken and may provide other options for handling unpaid bills.

The Community is always open to help you again if you need further assistance tracking loans. 

@dairydetippe 

In your chart of accounts, create a bank account called "Clearing Account" and an other current liability account called "Loan Payable - Vendor ABC" or something similar.  Then, pay all of the bills using the clearing account.  You should now have the entire loan balance sitting as a negative amount in the clearing account.  To move that into the loan payable account, create a journal entry: debit Clearing Account and credit Loan Payable - Vendor ABC.  You now have the loan payable to your vendor.  When you make payments on the loan, write a check and assign the principal portion to the Loan Payable - Vendor ABC account and the interest portion to your interest expense account.  That will reduce the principal balance and increase your interest expense with each payment.

I would suggest making a note on each bill that it was converted to a loan payable.