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Level 1

How to record the pay back of a loan if the loan was not recorded in the beginning?

I joined this company in June 2018. The record of this company before June was not clear and many records are missing. Today, my boss said that we have to pay back a loan we had made in Jan 2018. (Let's say the loan = USD10,000). However, when I check the record of Jan 2018, there was no record of USD10,000 had been received... For I loan that I have never borrowed but I have to pay back now, how can I record this? Just treat this USD10,000 as an expense of this month?

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Best answer 09-26-2019

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Level 2

How to record the pay back of a loan if the loan was not recorded in the beginning?

Hi Miko,

Let me assist you in recording your loan payments.

Since the loan was not recorded in the first place, we have to record it first before recording a payment. This way, your reports will not display a loss if you only record it as an expense. Follow the steps below to set up a business loan, enter an opening balance, and record the payment.

First, create a liability account for the loan.

  1. Click the Gear icon
  2. Choose Chart of Accounts.
  3. Select New.
  4. On the pop-up window, choose Other Current Liabilities or Long Term Liabilities for the Account Type depending on the type of your loan.
  5. Choose Loan Payable for the Detail Type
  6. Enter a name for the account.
  7. Click Save and close.

Next, enter the “USD10, 000” as an opening balance.

  1. Click the Plus icon (+)
  2. Choose Bank Deposit.
  3. On the Account field drop-down, select the bank account where the loan funds will be deposited.
  4. Enter the date.
  5. In the Account column on the line items, choose the account you created and the amount.
  6. Save and close.

Lastly, record the payment.

  1. Click the Plus icon (+).
  2. Choose Check/Cheque.
  3. Add a check number if you send an actual check.
  4. Enter these information in the Account details.
    1. First line: Liability account for the loan and the amount of payment
    2. Second Line: Expense account for the interest and the amount
    3. Succeeding lines: Any extra fees along with the appropriate accounts.
  5. Select Save and close.

The set of steps I've shared is a general way on how to record loans in QuickBooks Online. But I still recommend contacting your accountant for further accounting-specific help.

If you don’t have an accountant available, you may visit our ProAdvisors page. You can contact one of our ProAdvisors and ask them for accounting advice.

If you have other questions, feel free to leave a comment below.

View solution in original post

5 Comments
Highlighted
Level 2

How to record the pay back of a loan if the loan was not recorded in the beginning?

Hi Miko,

Let me assist you in recording your loan payments.

Since the loan was not recorded in the first place, we have to record it first before recording a payment. This way, your reports will not display a loss if you only record it as an expense. Follow the steps below to set up a business loan, enter an opening balance, and record the payment.

First, create a liability account for the loan.

  1. Click the Gear icon
  2. Choose Chart of Accounts.
  3. Select New.
  4. On the pop-up window, choose Other Current Liabilities or Long Term Liabilities for the Account Type depending on the type of your loan.
  5. Choose Loan Payable for the Detail Type
  6. Enter a name for the account.
  7. Click Save and close.

Next, enter the “USD10, 000” as an opening balance.

  1. Click the Plus icon (+)
  2. Choose Bank Deposit.
  3. On the Account field drop-down, select the bank account where the loan funds will be deposited.
  4. Enter the date.
  5. In the Account column on the line items, choose the account you created and the amount.
  6. Save and close.

Lastly, record the payment.

  1. Click the Plus icon (+).
  2. Choose Check/Cheque.
  3. Add a check number if you send an actual check.
  4. Enter these information in the Account details.
    1. First line: Liability account for the loan and the amount of payment
    2. Second Line: Expense account for the interest and the amount
    3. Succeeding lines: Any extra fees along with the appropriate accounts.
  5. Select Save and close.

The set of steps I've shared is a general way on how to record loans in QuickBooks Online. But I still recommend contacting your accountant for further accounting-specific help.

If you don’t have an accountant available, you may visit our ProAdvisors page. You can contact one of our ProAdvisors and ask them for accounting advice.

If you have other questions, feel free to leave a comment below.

View solution in original post

Highlighted
Level 1

How to record the pay back of a loan if the loan was not recorded in the beginning?

I am trying to follow your directions on setting up a loan, however in my QB 2019 for Mac it does not flow the same. I can set up the loan as a Long Term Liability but when I try to apply the payments from my register the loan amount does not change. What am I doing wrong? Thanks in advance!

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QuickBooks Team

How to record the pay back of a loan if the loan was not recorded in the beginning?

I'm here to help you track your loan account, harriscal17. 

 

Good job that you've set up your Long Term Liability Loan account. Now that you have a liability account for the loan, here’s how to record the loan amount.  

  1. From the Banking menu, select Make Deposits.
  2. In the Payments to Deposit window, select Cancel.
  3. From the Make Deposits select the account to deposit the loan into in the Deposit To field. 
  4. Select the liability account you created in the From Account column.
  5. Enter the loan amount.
  6. Click Save

For more details in tracking and recording your loan you can check out this article: Manually track loans in QuickBooks Desktop . Just drill down until you reach the steps for QuickBooks Desktop for Mac.   

 

Get back to me if you have other questions. Take care! 

Highlighted
Level 1

How to record the pay back of a loan if the loan was not recorded in the beginning?

what if the money was paid straight to the loan owed. So you have no money to deposit.

Example: I have bank 1; bank 1 has a loan of 10,000 so tractor supply paid off  my loan in bank one with a check from tractor supply to bank one.  no money was exchanged with me. How do I record this in QBO

Highlighted
Level 1

How to record the pay back of a loan if the loan was not recorded in the beginning?

sorry wrong reply