@Conniepresley
When a business is purchased with a loan:
Inventory xx
Furniture & Equipment xx
Land & Buildings xx
Accounts Receivable xx
Goodwill xx difference between net assets and purchase price
Accounts Payable xx
Loan Payable xx
LT Loan Payable xx
Set up Loan Payable for the principal owed for the next 12 months (Account type is Other Current Liabilities, Detail type is Other Current Liabilities).
If there is a portion of the principal due more than 12 months from now, that goes to Long Term Loan Payable (Account type is Long Term Liabilities, Detail type is Other Long Term Liabilities).
For loan repayment:
Add a vendor record for the person financing the business sale.
Make an Excel sheet to calculate the interest due on the decreasing principal.
Setup a recurring transaction to begin on first due date and recur until loan is paid.
Gear > Recurring transaction > New > Transaction type is Bill
Loan Payable and Interest expense are your categories. The interest amount is taken from the spreadsheet and will decrease slightly every month.
Add two more lines to this transaction to move a month's worth of principal from Long Term Loan Payable to Loan Payable, to keep those balances right where they should be.
