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Miko
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?

Solved
Best answer September 26, 2019

Best Answers
jcgomez
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

13 Comments 13
jcgomez
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.

harriscal17
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!

Catherine_B
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! 

cltrn1
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

cltrn1
Level 1

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

sorry wrong reply

 

leebrendalee
Level 3

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

I was kinda hoping someone had replied to his question at the end.  The money wasn't actually deposited into the bank account.  For mine, the money went into personal and then it was dispursed in another way!

 

Could I just setup as AP?

MJoy_D
Moderator

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

Let me help you record this transaction, @leebrendalee.

 

If this loan is part of your business, then you can record this as an Expense. But if not, you can have this as an Owner’s withdrawal. 

 

To record a loan payment, you must create a liability account. This liability account will record the loan and its payments. 

You can set up a liability account from the Chart of Accounts to record the loan. 

 

From here, you can put your loan money directly into your bank account by creating a journal entry. Finally, to record the loan payment, simply create a cheque from the + New button.

 

See the following article for more information about this: Set up a loan in QuickBooks Online

 

To pay an owner’s draw, you’ll just have to create an Equity account from the Chart of Accounts. Then, write a cheque from the bank account where your money will be withdrawn.

 

To create an Equity account: 

  1. Go to the Gear icon and choose Chart of Accounts.
  2. Click New and from the Account Type drop-down, choose Equity.
  3. From the Detail Type drop-down, choose Owner’s EquityEnter an opening balance.
  4. Select Save and Close.

To write a cheque from an Owner's equity account:

  1. Go to the + New button and select Cheque.
  2. Choose the bank account where your money will be withdrawn.
  3. Add all the necessary information.
  4. In the Account field, be sure to select the Owner's equity you created.
  5. Select Save and Close.

Check these articles for more information: 

I'm always here if you need more help. Have a great rest of the day!

Sheen Solutions
Level 2

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

Hi Miko,

 

I have  bank charges from  my bank. such as witholding tax.How do i record this. I also have this same tax from  government  customers.

 

Janet

MirriamM
Moderator

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

Welcome to the thread, @Sheen Solutions.

 

You can create a bank deposit transaction and record the charge as a negative amount.

 

Here's how:

  1. In the left menu, click the + New button.
  2. Under OTHER column, select Bank Deposits.
  3. You should see the payment you entered in the Select the payments included in this deposit section at the top.
  4. Place a checkmark to select the payment you want to deposit.
  5. From the Add other funds to this deposit section, enter the amount of the bank service fee charged to you as a negative amount.
  6. From the Account section, select the Expense account you usually use in tracking bank fees.
  7. Verify that the deposit amount is correct and click Save and close.

If you need tips and related articles in the future, you can always visit our QuickBooks Community help website.

 

If you have other questions or concerns, let me know by leaving a comment below. I'm always here to help you out. Have a great day!

VeeHog
Level 2

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

But if the money was never deposited to the bank, as he says, this will not work.  I think the correct answer is to find out how the loan was disbursed and where the funds went.  Usual situation is Owner's Draw with loan proceeds going directly to owner.  But that has to be determined before anything can be put on the books.

Pattey
Level 1

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

We were doing a simple quickbooks online per account. We just tracked our monthly truck payments splitting out interest and principle. Now we are planning on buying  a building and we need to get these liabilities put into the correct account and not just as an expense for a proper balance sheet. Problem is the trucks were brought in 2018 and 2019. Should I go back this far and set up the liabilities accounts? I can just change each transaction all the way back to the correct account? Or should I not?

Solutions D
Level 1

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

Can any one help I have mistakenly saved a wrong deposit  and I want to delete it 

Kristine Mae
Moderator

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

Let me help you delete the transaction, Solutions D.

 

You can follow these steps:

  1. Click the New or Plus sign (+) button.
  2. Select Bank deposit.
  3. Click the Clock icon beside the Bank Deposit label to open the previous transactions.
  4. Select the deposit.
  5. Check the box beside the deposit.
  6. Click More, then select Delete.
  7. Select Yes to confirm.

I'll add this article to help you manage your deposits: Record and make bank deposits in QuickBooks Online.

 

Feel free to visit us if you have other concerns. We'll be right here to assist you. Take care!