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ProSapien
Level 1

Loan Overpayment Refunded with Check

We had a loan that was paid off. After the payoff, some fees were removed so there was a negative balance. This was refunded to us by check. The check was sent to us, held a number of days, and then deposited in the bank.

 

How do I correctly account for all those parts? All the examples I can find assume I am the vendor making the refund. Instead, my business is the customer who received the refund.

 

Thank you!

Solved
Best answer April 09, 2021

Best Answers
AlcaeusF
Moderator

Loan Overpayment Refunded with Check

Hi there, @ProSapien.

 

Thank you for providing detailed information here in the Community. I can help you record the refund check in QuickBooks Online.

 

It's recommended to track the date you receive the check, as well as the time it was deposited to the bank. You can use the Journal Entry (JE) feature to record the transaction, then put it on the Undeposited Funds account.

 

However, I suggest reaching out to an accountant for expert advice about which accounts to debit and credit. This way, we'll be able to ensure your books are accurate and error-free.

 

Here's how to enter a JE:

 

  1. Click the + New option in the upper-left corner.
  2. Select Journal entry under Other.
  3. Choose the accounts to debit and credit. 
  4. Enter the necessary information.
  5. Hit Save and close.

 

Once you're ready to add it to your bank, you can proceed with making a deposit (the JE should reflect as a transaction you can add to your bank). The option is available when you press on the + New option from the left side (see screenshot below).

 

 

I've also attached an article you can use to learn more about debits and credits when creating journal entries in QuickBooks: Create a journal entry in QuickBooks Online.

 

Drop me a comment below if you have any other questions about entering transactions in QuickBooks. I'll be happy to help you some more.

View solution in original post

3 Comments
AlcaeusF
Moderator

Loan Overpayment Refunded with Check

Hi there, @ProSapien.

 

Thank you for providing detailed information here in the Community. I can help you record the refund check in QuickBooks Online.

 

It's recommended to track the date you receive the check, as well as the time it was deposited to the bank. You can use the Journal Entry (JE) feature to record the transaction, then put it on the Undeposited Funds account.

 

However, I suggest reaching out to an accountant for expert advice about which accounts to debit and credit. This way, we'll be able to ensure your books are accurate and error-free.

 

Here's how to enter a JE:

 

  1. Click the + New option in the upper-left corner.
  2. Select Journal entry under Other.
  3. Choose the accounts to debit and credit. 
  4. Enter the necessary information.
  5. Hit Save and close.

 

Once you're ready to add it to your bank, you can proceed with making a deposit (the JE should reflect as a transaction you can add to your bank). The option is available when you press on the + New option from the left side (see screenshot below).

 

 

I've also attached an article you can use to learn more about debits and credits when creating journal entries in QuickBooks: Create a journal entry in QuickBooks Online.

 

Drop me a comment below if you have any other questions about entering transactions in QuickBooks. I'll be happy to help you some more.

View solution in original post

ProSapien
Level 1

Loan Overpayment Refunded with Check

Thank you for the direction.

 

I think the solution, in this case, is to change the category on the downloaded loan credit to Undeposited Funds. I was going to set the same category on the bank deposit debit, but Quickbooks already created a match for the transaction.

 

It's solved now. Thank you!

ZackE
QuickBooks Team

Loan Overpayment Refunded with Check

Thanks for following up with the Community, ProSapien.
 

I'm happy to hear AlcaeusF was able to help with entering your refund.
 

You'll additionally be able to find many detailed resources about using QuickBooks in our help article archives.
 

I'll be here to help if there's any questions. Have a fantastic weekend!

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