Can I go back to January, 2020 and begin journal entries for a loan? I have been reconciling my banking monthly and worried this could cause major issues? Thank you!

SMT22 · ‎December 07, 2020

JessT · ‎December 07, 2020

Hi there, SMT22!

I'm not seeing your other posts, but I'm happy to shed light on the effects of adding journal entries.

First off, please know that two balances will be affected here. The account balance and the beginning balance of your reconciliation, but depends on the scenario.

If your journal entries will include your bank account, they will post to your bank register and affect the account balance, and will also affect the beginning balance of your next reconciliation.

If these journal entries will include bank accounts and will replace some of the reconciled transactions with the same amounts, just make sure to delete the transactions that they'll be replacing. Then, mark the JEs as reconciled, meaning you'll put an R mark in them. That way, the account, and the reconciliation balances won't change.

Lastly, you will see reported changes in your old reconciliation reports because though you are replacing the transactions, they are not the original ones. So, might as well save a copy of the old reports before making JEs. Also, you can check your reports as you enter the first few JEs to see the changes. You can even try to reconcile the next period before and after you enter the JEs so you can follow the changes in the Beginning Balance. Just my tips for you.

Let me know if you have more questions before you proceed with your journal entries. Have a good one!

View solution in original post

AileneA · ‎December 07, 2020

Hello, SMT22.

Thank you for contacting us in Community. To make sure we're on the same page, Is the loan part of your business? If yes, then you'll need to enter it as an Expense. If not, you can have this as an Owner's withdrawal.

To begin writing the loan payment, you must first create a liability account. This liability account will be your recording of the loan and payments.

You can set up a liability account from the Chart of Accounts to record the loan.

Once done, you can set your loan money straight into your bank account by creating a journal entry. Finally, to record the loan payment, simply create a check from the + New button. Though, I suggest consulting your accountant when creating a journal entry to prevent any discrepancy in your book and for further accounting-specific help..

View the following article for more insight about this: Set up a loan in QuickBooks Online.

You can also check these articles for more information about creating an Equity account and how to write a check from an Owner's equity account:

If you need tips and related articles in the future, you can always visit our QuickBooks Community help website.

I'm more than happy to jump back on if you have any other concerns in QuickBooks, please let me know by adding a comment below. Have a good one!

SMT22 · ‎December 07, 2020

Thank you so much for replying so quickly! This is very helpful but I'm still confused about starting the new journal entries to the previous months that I have already reconciled (in my banking). I'm worried since it's already reconciled that it will throw everything off! I appreciate your help so much!

SMT22 · ‎December 07, 2020

I just want to double check that you received my reply, I had another question and clicked post but I don't see it posted here.

JessT · ‎December 07, 2020

Hi there, SMT22!

I'm not seeing your other posts, but I'm happy to shed light on the effects of adding journal entries.

First off, please know that two balances will be affected here. The account balance and the beginning balance of your reconciliation, but depends on the scenario.

If your journal entries will include your bank account, they will post to your bank register and affect the account balance, and will also affect the beginning balance of your next reconciliation.

If these journal entries will include bank accounts and will replace some of the reconciled transactions with the same amounts, just make sure to delete the transactions that they'll be replacing. Then, mark the JEs as reconciled, meaning you'll put an R mark in them. That way, the account, and the reconciliation balances won't change.

Lastly, you will see reported changes in your old reconciliation reports because though you are replacing the transactions, they are not the original ones. So, might as well save a copy of the old reports before making JEs. Also, you can check your reports as you enter the first few JEs to see the changes. You can even try to reconcile the next period before and after you enter the JEs so you can follow the changes in the Beginning Balance. Just my tips for you.

Let me know if you have more questions before you proceed with your journal entries. Have a good one!

SMT22 · ‎December 08, 2020

Thank you so much for your help!!!!!! I will try what you suggested! Enjoy your day!!!

Topics

Training

Community

Resources

Can I go back to January, 2020 and begin journal entries for a loan? I have been reconciling my banking monthly and worried this could cause major issues? Thank you!