cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Not applicable

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?

Solved
Best answer 09-26-2019

Accepted Solutions
Community Explorer **

Hi Miko, Let me assist you in recording your loan payment...

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

1 Comment
Community Explorer **

Hi Miko, Let me assist you in recording your loan payment...

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