When a business leverages their Accounts Receivable asset to obtain a loan, the loan deposit is recorded as a short-term liability on the Balance Sheet. The principal payments are applied to reduce the loan liability balance. The loan fees and interest fees are recorded on the Profit and Loss report as an expense. There is no need to use an Entity to record this transaction unless the originating deposit and loan payments are not coming through the connected bank feed in QuickBooks Online. When the payments come through the connected bank feed you can split the transaction to record the expense and principal amounts. If either side of the transaction does not come through the connected bank feed, you can journal it into the books accordingly.