How to record an advance on a loan in quickbooks online?

wpslm2016 · ‎December 06, 2019

If the original loan is set up in QuickBooks Online, how can we show the advance of the loan- resulting in a new loan taking over the remaining owed balance & showing the first loan as paid in full?

JessT · ‎December 06, 2019

Hi wpslm2016!

Let’s record your new loan and use a portion of it to pay the balance of the old one. To achieve this, we’ll record it via journal entry, and we’ll use your existing loan account in this transaction.

For your visual reference, I made a sample with the following details: $2,500 - loan balance and $20,000 - new loan amount. Then, the remaining $17,500 would go to my checking account.

Click on +New and select Journal Entry.
On the first line, choose your loan account and enter the new amount ($20,000) in the Credit field.
On the second line, choose your loan account again, and enter the balance ($2,500) in the Debit field.
On the third line, choose your business account and enter the difference ($17,500) in the Debit field.

This is how the transaction is posted to your loan account.

I can be of any help with your entries. You can go back to this thread if you need with other transactions. Have a good day!