Loan

Hello there, Grimayoj. I'm here help you fix this concern regarding your loan transaction.

First, let's delete the Journal Entry you created.

Next, let's create a Pay bill using the Owner's draw to record it to your Equity account. If you don't have an account, you may refer to this article on how to create an Owner's Equity account: Set up and pay an owner's draw.

But before we proceed, let's create a journal entry. Here's how:

1. Click + New.
2. Select Journal entry.
3. Under Account, select Owner's Draw. In the Credit enter the total amount you need to pay.
4. In the second line, choose Accounts Payable (A/P). Debit the total amount you need to pay. Under Name, enter the Minority owner.
5. Click Save.

Afterward, let's create a pay bill. Here's how to do it:

1. Select + New.
2. Under Vendors, choose Pay bills.
3. Under Payee, tick Minority owner and click Save.

If you have any additional questions about QuickBooks Online, please post them here in the community. Stay safe!

@Grimayoj 

Disregard @MelroseV 's response.  It's nonsense.  I don't think actual people are behind these "QB Employee" posts.

The easiest way to do this is to enter the bill from the vendor and pay it with a bank account called 'Clearing Account'.  If you don't have one, set one up.  Then, create a journal entry and debit the Clearing Account and credit a loan payable liability account for the amount of the bill/payment.  You now have the bill paid and an amount due in the loan payable liability account.  Then, write a check to the employee/owner for that amount.  That's it.  Now, the bill is paid, the employee/owner has been reimbursed, and the loan is cleared.

@Grimayoj 

Oops, I forgot to mention that you need to assign the loan payable liability account to the reimbursement payment made to the employee/owner.  

Can you show me an example? Thanks

Can you show me an example

Thanks

@Grimayoj 

Just follow the instructions in my post.  You can always delete the bill, journal entry, and/or check if it doesn't work the way you anticipated.      

Thanks but QBO gave me an error when I tried to debit the Clearing bank account and post it..

In addition had a hard time understanding that I needed to assign the loan payable liability account to the reimbursement to the employee.. 

@Grimayoj 

OK, got it.  Were you able to pay the bill from the Clearing Account?  Make sure the Clearing Account is set up as a bank account in QB.  After you do that, create a journal entry that debits the Clearing Account and credits a loan payable liability account.  Set up a loan payable liability account if you don't have one.  If you try and credit A/P on the journal entry, it requires a vendor which you don't want.  There is no reason you should get an error message when making the journal entry if the Clearing Account is a bank account and the loan payable liability is not A/P.  At this point, you have booked the expense from the bill and you still have a balance in the loan payable liability account that you owe to the employee.  To clear that, issue a check to the employee and assign the loan payable liability account to the check.  That's it.  After all that, all you have on your books is the vendor expense and the reduction in cash from the payment just as if you had paid the vendor directly.  

Thanks!!

Makes complete sense except I'm not paying by check I wired the money to him..

Thanks

@Grimayoj 

You can use WIRE or ACH as the check number.  

Im in QBO... I didnt know you could issue a check but state its a wire... Seems weird to me..

Thanks