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Andrew 17
Level 1

LLX outside payment

Question:

A general contractor has an account payable of $4000 to the Painter.  

The general contractor pays the painter $4000 using another business's general account that the general contractor owns called LLX Properties. 

How is this transaction recorded in Quickbooks?  It can't be a loan to LLX Properties because the general contractor never deposited any LLX Properties money. The transaction was straight from LLX Properties.

Please give a clear answer and explanation.

 

 

3 Comments
MaryJoyD
QuickBooks Team

LLX outside payment

I can help you with recording these transactions to your account, @Andrew 17

 

You’ll just have to create a bill for the painter. Then, create a journal entry to record the loan or the payment made by LLX. Lastly, use the Pay bills feature to apply the credit to the bill.

 

You can enter a bill for the $4000. It's how you record transactions that you need to pay at a future date. 

 

Here's how:

  1. Go to the Vendors menu and choose Enter Bills.
  2. Select a vendor from the dropdown, then fill out all the required fields.
  3. Choose the type of bill (Expenses or Items) you want to record.
  4. Pick Save to record the bill.

 

Then, create a Journal Entry for LLX. The accounts affected are the liability and accounts payable account. You can also seek an advice from an accountant for guidance with the accounts to use.

 

 

Follow the steps below:

 

  1. Go to the Company menu and select Make General Journal Entries.
  2. Enter your debit and credit amounts.
  3. Select on Save & Close.

 

Lastly, apply the credit from a vendor to a bill payment:

 

  1. Go back to the Vendors menu and choose Pay Bills.
  2. Complete the bill payment information.
  3. Select and highlight the bill to which you want to apply for the credit.
  4. Click the Set Credits button.
  5. In the Credits pane, select each credit that you want to use for this bill.
  6. Click the Done button.
  7. Finish paying the bill in the Pay Bills window.

 

Check these articles for more information:

 

See this Accounts Payable workflows in QuickBooks Desktop article to know more about the workflow in QBDT.  

 

Please get back to me if you require additional assistance in doing any of the steps above. I'd be here to back you up. Have a great day!

Andrew 17
Level 1

LLX outside payment

Hi, thank you for your help.  

I'm a little confused regarding the transaction.

So, the contractor has a bill payable to the painter. But because the contractor doesn't have enough funds in the bank account, he pays the painter using another (separate) entities checking account. The gen contractor wants to make sure he puts the money back into LLX Properties.  So this would definitely be a loan. Can you break down the steps to me further please.

 

What about LLX Properties books? it's a loan to the gen contractor. 

Joesem M
QuickBooks Team

LLX outside payment

Thanks for getting back to us, @Andrew 17.

 

Since the contractor uses the other account to pay the painter, you'll need first to enter a Bill. This way, you'll have a reference when they pay this in the future. 

 

To ensure that the money puts back to the LLX Properties, you can enter a journal entry to record the transaction. For the Credit, you can use the liability account it's the credit note: Loan form LLX and Accounts Payable for the painter - Debit.

 

However, I'd suggest contacting your accountant to ensure the accuracy of your books.

 

Once done, apply the credit to the bill, so you can process a Bill Payment. Just follow the steps and articles shared by my colleague MaryJoyD for the process.

 

If you need further assistance with this process, feel free to get in touch with our Customer Care Team. They have extra tools that can walk you through the steps. 

 

Also, you can browse related topics, such as managing income and expenses, running reports, etc. from our general support page. For more info, please check out this resource: QuickBooks topics.

 

Let me know if you have other questions managing your transactions in QuickBooks. I’ll be around ready to help you anytime. Have a good one!

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