Lost Revenue and Reimbursement

MegsBarber · ‎January 26, 2023

To start off, we have a holding company/management company that is in charge of 2 other businesses. We'll say the holding company is ABC. Business 1 suffered a ransomware attack that put us out of commission for a couple months and therefore caused lost revenue. We took out a loan with Business 2 to get funds to cover things while we waited for the insurance company to do their thing. We did receive a check for insurance months later. My problem is trying to figure out how to balance it out in QB. We had a different accountant at the time and I am trying to figure out how she did it originally and how we should fix it now.

So ABC holding filed the insurance claim. Business 2 took out a loan, let's say for 100k to help Business 1 stay on their feet while they sort out the insurance claim. (Side note: Business 1 truthfully hasn't been doing well so they were unable to secure a loan in the interim - that is why Business 2 was involved.)

Funds were sent from the bank to Business 2, then they sent it to ABC holding, then it was sent on to Business 1. It was filed as a Notes Payable.

Once the claim was done, we were sent a check for 125k, and that was sent directly to ABC holding. We then cut a check to the bank to pay back the loan as it was only a temporary loan and was accruing interest.

My problem is the Note Payable stuck on Business 1's books. I can't figure out how we should remove that since they got the funds due to their estimated lost revenue. I know this is super complicated and I need to uncomplicate it. Business 1 should technically not owe anything to any of the other companies but how do I make it look that way in QB?

SarahannC · ‎January 27, 2023

Hello Megs, I appreciate you for providing enough details of your concern.

Yes, this situation is quite complicated. No worries, I'm here to ensure you'll be able to track them properly on your QuickBooks Desktop.

Based on the information you shared, you've already recorded the funds that were sent from business 2 to business 1. Now, we can follow these steps to record them in your book.

If you haven't tracked the ABC holding yet within your company file, we can set it up as a vendor.
Create an expense account for interest.
Create a deposit to record the loan amount/Note Payable to the appropriate bank.
- Go to the Banking menu, then select Make Deposits.
- In the Deposit To field, select the account to deposit the loan into.
- Check the Date and enter an optional Memo.
- In the From Account column, select the Liability account/ Note Payable.
- In the Amount column, enter the loan amount.
- Click Save & Close.
Write a check to record the loan payment and interest.
- Go to the Banking menu, then select Write Checks.
- Select the Bank Accountyou want to use to pay the loan.
- Go to the Expenses tab.
- On the first line, select Note Payable. Then enter the payment for the principal amount.
- On the second line, select the interest expense account. Then enter the payment for the loan interest.
- Select Save & Close.

For additional details, we can refer to this article: Learn how to set up accounts for your loans and manually track them in QuickBooks Desktop.

Also, here's an article for additional details and tips when doing other tasks within your company file: QuickBooks Desktop Help Articles.

I'll be around if you need anything else with tracking loans and anything related to QuickBooks Desktop. Take care and stay safe.

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