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Established Community Backer ***

Re: Loan using personal Pledged Asset Line acct.--- how to manage loan transactions in QB?

Greetings Luz,


As I noted previously, you need to have the owner's Accountant advise here. I would not have handled the transaction as you have noted. As this was a personal and not a business loan, so I would NOT record it as a business loan or record the interest expense as a business expense.


It does not matter that all the money received from the personal loan is being invested in the business. I would have simply booked the money transferred into the business owner's checking account from their personal account to the Equity account "Owner Investment". The repayment of their personal loan would be part of their personal financial liabilities.


However, it is an option to record the money as a liability for the business, but this is an entirely different accounting process that the business owner's Accountant should advise on.