I have a new client that started QBO on Jan 1, 2020. She has a few loans that were taken out in 2019, but payments continued in 2020. I started liability accounts for each of these loans and categorized them accordingly as the transactions came through the auto bank feed. I did not enter an opening balance because I did not want the OBE account to have all of those negative entries. Before I hand the file over to her CPA, I want to offset the negative balances on the balance sheet. Do I enter a JE? If so how?
Originally, I did calculate the loan balance as of Jan 1 and entered it as the starting balance. QBO automatically put the starting loan balance into the opening balance equity account, which threw off my balance in the OBE account. I found on this community site that you are not supposed to enter the opening balance while entering the liability because it will always default to the OBE account. So I redid the liability accounts with no starting balance, knowing I needed to enter it somewhere - I just did not know what account to debit.
Thank you for pointing me in the right direction - I will debit the OE acct.