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joycesyi
Level 3

How to enter borrowing shareholder's loan and paying back the loan?

Hello, my company is a Corporation and taxed as S-corp. I'm using Quickbooks Online Essentials. 

 

From the beginning of the year, I created a virtual "Bank" type of account names "Expenditure made by shareholder ABC". In this chart of account, I record all the expenses paid out of my own pocket by choosing the payment account "Expenditure made by shareholder ABC" for each expense transaction. I also created an "Other Current Liabilities" type of account names "Shareholder ABC's loan" by using the journey entry to manually zero out the "Expenditure made by shareholder ABC" account balance at the end of the year. Say right now the account balance of "Shareholder ABC's loan" is $10,000 and the virtual bank account of "Expenditure made by shareholder ABC" is balanced to 0 for year-end accounting/tax purposes. (Which means I made a total of $10,000 purchases for the company by using my own money, but I'm not in a hurry to payback myself.)

 

And right now, I don't know how to bookkeeping 3 other bank transactions that are synced from my business bank account to Quickbooks. The 3 transactions are as the attached images:

I loaned $15,000 to the company on 05/2019 for short term capital turn-over by writing a check and ATM deposit this $15,000 check into my business checking account. In 10/2019 and 11/2019, I paid back part of the loan, $5,000 and $7,000, separately, to myself. So there are $3,000 ($15,000-$5,000-$7,000) unpaid loan currently. 

 

My question is: How to add these transactions to my book? I don't know where to click. Should I click add, or create something first and then match? I know my purpose is to record the balance of the account names "Shareholder ABC's loan" risen to $13,000 from $10,000 after added these three new transactions. But I don't know the sequence and the detailed steps. And does IRS allow me to loan to my company with 0% APR if I want to give up any interest if possible? 

 

Thanks so much for your help in advance!!!!

1 Comment 1
Rasa-LilaM
QuickBooks Team

How to enter borrowing shareholder's loan and paying back the loan?

Hello there, joycesyi.


Welcome aboard to the Online Community. To track these transactions, you’ll have to categorize and then add them to the account.

 

  1. Tap the Banking menu to select Banking.
    loan.png
  2. This will take you to the Bank and Credit Cards page.
  3. Go to the For Review tab to select the entry you’re working and then click on it to expand the line.
    loan1.png
  4. From there, click the Category drop-down to choose the Other Current Liabilities account.
    loan2.png
  5. Once done, hit the Add button.

Follow the same steps above to record the remaining entries.

 

In regard to your other concern, I recommend consulting with the IRS. They can explain in details about creating a loan with 0% APR.

 

For additional information, check out the following article. It provides an overview on how to create a loan account as well as steps to record the payment: Loan.


If there’s anything else I can help you with, post a comment below. I’ll be right here to assist further. Enjoy the rest of the day.

 

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