How to record a loan that bank pays vendor directly (money did not come through the account)? Thank you

Hello, @Benpiggy.

Recording loan in QuickBooks Online is just a few clicks. I'm glad to present the complete instructions with screenshots to accomplish this. 

To start, let's create a bank provider, then make a payment using that bank.

Here's how: 

1. Go to the Accounting tab, then choose Chart of Account. 
2. Click New on the right side. 
3. Choose Account Type and Detail Type in the drop-down. 
4. Enter a unique name in the box. 
5. Complete the needed information, then tap Save and close. 

After that, go to the Plus icon, then select Check under Vendor to record the payment. See the sample screenshot below. 

You can always check the report by going to the Accounting tab and hit View register. 

I've also added articles about managing vendor's transaction, information, and other related topics. 

• Expenses and vendors
• What is the difference between bills, checks, and expenses?

Please come back to me if you have follow-up questions. I'm eager to help. Take care. 

Dear MichelleBh,

Thank you for the prompt reply.

In the middle figure, payee would be the one that received the cheque, however, the bank account option is my checking / money marketing account.  As stated the money went directly to the payee/vendor by the SBA and therefore my bank never saw the money per se.  I should not choose my checking account as the option, should I?

I still have to record somewhere to document the amount of loan I received, as payment for the vendor.

Any suggestion welcome.

ben

I'd like to share some steps, Benjamin.

If you're done recording the loan and want to add a repayment, you can follow these steps:

1. Go to + New > Check. 
2. Select the bank you use to pay the loan from the Bank account drop-down.
3. Add a check number if you plan to send an actual check. If you use direct withdrawal or an ETF, enter Debit or ETF in the Check # field.
4. In the Category Details section of the check, select the liability account for the loan from the Category drop-down. Then enter the payment amount.
5. On the second line, choose the expense account for the interest from the Category drop-down. Then enter the interest amount.
6. On additional lines, add any additional fees. Select the appropriate accounts from the Category drop-down.
7. When you're done, Hit Save and close.

Otherwise, read this article for the process: Set up a loan in QuickBooks Online. To view other guides and tutorials for QuickBooks Online, feel free to visit our general help topics page.

You're always welcome to leave a reply here if there's anything else you need. I'm just a post away to answer your questions. Take care!

Michelle,

I still don't understand this. Like @Benpiggy , I have received a loan and those loan proceeds went directly to a vendor to purchase equipment -- the loan proceeds never went to my bank account; I then make monthly payments to the lender. I don't see your response as solving the issue of (1) needing to initially book the full loan amount as a Liability (a Notes Payable) on my balance sheet. How do I go about recording the initial loan's principal balance to my Balance Sheet (a liability), and the lender-financed equipment to my Balance Sheet (an asset)? I assume I can make a journal entry that is, say: Debt $100,000 to Equipment (asset) and  Credit $100,000 to Notes Payable (liability). That contemplates the fact that I never received the cash to my bank account, but instead the loan funds went directly to equipment vendor for the equipment purchase. Is that correct?

Michelle,

I still don't understand this. Like @Benpiggy , I have received a loan and those loan proceeds went directly to a vendor to purchase equipment -- the loan proceeds never went to my bank account; I then make monthly payments to the lender. I don't see your response as solving the issue of (1) needing to initially book the full loan amount as a Liability (a Notes Payable) on my balance sheet. How do I go about recording the initial loan's principal balance to my Balance Sheet (a liability), and the lender-financed equipment to my Balance Sheet (an asset)? I assume I can make a journal entry that is, say: Debt $100,000 to Equipment (asset) and  Credit $100,000 to Notes Payable (liability). That contemplates the fact that I never received the cash to my bank account, but instead the loan funds went directly to equipment vendor for the equipment purchase. Is that correct?

Thanks for joining this thread, @spensersh. I have some information to share with you.

Since the loan amount went directly to your vendor, yes, you can create a journal entry to record it in QuickBooks Online.

Here’s how:

1. Click the + New button.
2. Select Journal entry.
3. Select the correct accounts and enter the amount in the column.
4. You can enter information in the Memo section. This way, you know why you made the journal entry.
5. Press Save and close.

I also recommend contacting your accountant to ensure everything is accurate. If you don't have one yet, you can visit our ProAdvisor website to find an expert. Our advisors can provide guidance from technical and accounting perspectives. Just simply enter your city or ZIP code.

I’ve attached a video tutorial on how to keep track of your balances, payables, and more in QuickBooks: Track What You Owe Your Vendors.

You can visit us anytime if you need further assistance managing your loan. We’re always here to help. Take care and have a good day!

I am having the same problem.

I do not understand how you are able to add the original loan amount to my long term liability note - it requires a choose a bank for it to come from... if I do this and add a bank, it now shows it as a an asset. Any help welcome. 

Thanks,

Sarah 

Hello,

i am in the exact same situation. Can you plz share what entry you made in your balance sheet for recording the loan that didn’t come to your bank?

Any information you provide will be greatly appreciated.

thank you 

Hello,

i am in the exact same situation. Can you plz share what entry you made in your balance sheet for recording the loan that didn’t come to your bank?

Any information you provide will be greatly appreciated.

thank you