@dadcowell
Opening Balance Equity (OBE) should be used as a last resort. It's like kicking the can down the road - someone will have to figure it out at some point. Personally, I would try and locate an amortization schedule for the loan and see where the principal balance got off. Presumably, the bank has received the payments so somehow $12K wasn't allocated to the loan payable liability account. Was it assigned to interest, thereby overstating the interest expense in a prior year(s)? I suppose there are a few possibilities but making a journal entry and reclassifying the $12K as OBE is dodging the issue.
