It's great to have you here in the Community! I'd like to provide you with some helpful information regarding interest-only payments in Line of Credit (LOC) in QuickBooks Online.
With QuickBooks, you can track your liabilities and expenses, enabling you to manage your cash flow better. This information can help you decide when to spend, borrow, or transfer funds. Here's how you can set up your liability and expense accounts:
Set up a liability account for the principle.
When you pay for things with your line of credit, record the transaction as a bill or expense in this account.
- Go to Settings, then select Chart of Accounts.
- Select New.
- From the Save account under ▼ the dropdown, select Other Current Liabilities.
- From the Tax form section ▼ dropdown, select Line of Credit.
- Enter a name in the Account name field.
- Select Save.
Set up an expense account for the interest.
If you incur interest charges, record your paid interest in this account.
- Go to Settings ⚙, then select Chart of Accounts.
- Select New.
- From the Save account under ▼ dropdown, select Expenses.
- From the Tax form section ▼ dropdown, select Interest Paid.
- Enter a name in the Account name field.
- Select Save.
Track your line of credit.
Once you’ve set up your two accounts, you can track the transactions in your line of credit. Make sure you record the bills and expenses, and if you want to put your credit funds into another account, you need to make a transfer.
Note: When you make a payment, you can track what you pay back to your bank or creditor. Either way, be sure to split the expense between principal and interest in the category details.
Furthermore, if you're interested in learning how to connect your bank and credit card accounts, or how to handle a customer credit or overpayment in QuickBooks Online, you can read the following articles:
If you require additional guidance with your interest-only payments in your Line of Credit, please don't hesitate to respond to this post. Keep safe, and I wish your business continued success.
