Transfer a loan to another loan account

Hi janezh!

It's great to see you in the Community! I'll help you record your boss's loan. However, please have this checked with an accountant to be sure your records are correct.

COMPANY A:

Create a liability account to track the bank loan.

1. Select Settings ⚙ and then Chart of Accounts.
2. Select New to create a new account.
3. From the Account Type ▼ dropdown, select Other Current Liabilities.
4. From the Detail Type, select Loan Payable.
5. Give the account a relevant name, like "Loan Payable (Bank of America)".
6. Click Save without putting a balance. Putting a balance will just increase the loan account balance without knowing where the money goes.

Record the $ 25,000 they received via bank deposit or journal entry. This should increase the balances of their loan account and their asset account, in which the actual money is deposited.

via bank deposit:

1. Click +New and select Bank deposit.
2. In the Account field at the top, select the asset account where the money is deposited or kept.
3. Go to the Add funds to this deposit section, and choose the loan account you create, and enter the amount.
4. Click Save and close.

via journal entry:

1. Click +New and select Journal entry.
2. Debit $25,000 to your asset account
3. Credit $25,000 to the loan account

Now, let's record the money that will be given to Company B. However, you didn't mention if Company B will still need to repay Company A or not.

To record the money that'll be given to Company B, you'll want to track it in an Other Current Asset account if it's repayable. If not, you can create an expense or something like a donation account instead. 

1. Select Settings ⚙ and then Chart of Accounts.
2. Select New to create a new account.
3. From the Account Type ▼ dropdown, select Other Current Assets.
4. From the Detail Type, select Loan to Others.
5. Give the account a relevant name, like "Loan to Company B".

Add Company B as a vendor. Then, record a check transaction for them against the asset account and use the loan, expense, or donation account that is created for them.

If Company B repays Company A, record it as a bank deposit or journal entry. But, this time the affecting accounts should be an asset and the loan account for Company B.

When Company A repays the bank, add the bank as a vendor and record a check transaction for them. In the Account field at the top, choose an asset account where the repayment is taken from. Then, in the Category details section, choose the loan account for the bank and enter the amount. If it carries an interest, add it in the second line.

If Company A does a staggered payment with interest, use the loan account in the first line and add another line to track the interest.

COMPANY B:

In Company B, you'll want to create a liability account to track the borrowed amount from Company A. If this is not payable, use a different account. Then, track the received money via bank deposit or journal entry. If it's payable, add company A as a vendor and create a check for them or record the repayment as a journal entry.

That will do it. If you have other questions in mind, feel free to go back to this thread.