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amr-ismail-trist
Level 2

I have a loan that I will be repaying in 1 year. I need to make 2 interest payments each for 5%. How do I record the future payments as Bills on QBO? to show in A/P

ex: I have a loan for $1,000 that I need to pay back in 1 year. Also, I need to pay 10% interest on 2 installments. the first in 6 months the second with the total loan repayment. How can I show it on QBO as a bills so that it would show in my A/P and would remind me to pay them?
Solved
Best answer September 13, 2021

Best Answers
Jovychris_A
QuickBooks Team

I have a loan that I will be repaying in 1 year. I need to make 2 interest payments each for 5%. How do I record the future payments as Bills on QBO? to show in A/P

Hi @amr-ismail-trist. I'm here to provide you more information on how to show future interest payments.

 

In relevant to my peer's response, you can add a new service item manually to show the interest rate at 5%. Then create a recurring bill transaction to show this in your A/P and remind you to pay them, including the interest payment.

 

Here's how:

 

  1. Go to Settings and then select Recurring transactions.
  2. Select Reminder List and then click New.
  3. Choose Bill.
  4. Enter Template name and Type as Reminder, remind 1 or 2 days before the transaction date.
  5. Interval should be Monthly, and you can choose the last (for example) Monday of every 6 months.
  6. Select the loan account in the Category Details and pick the interest payment item in the Item details.
  7. Click Save template.

 

For additional details about creating a transaction and setting a reminder ahead of time, you can refer to this article: Create recurring transactions in Quickbooks Online.

 

I also suggest consulting your accountant for professional advice with recording this type of transaction.

 

If you have other questions in mind about recording loans in QuickBooks, feel free to reach us back. We're always here to help you. Stay safe!

View solution in original post

4 Comments 4
JessT
QuickBooks Team

I have a loan that I will be repaying in 1 year. I need to make 2 interest payments each for 5%. How do I record the future payments as Bills on QBO? to show in A/P

Hi there, amr-ismail-trist.

 

Keeping your loan records accurate is really important so you won't miss any payment deadlines. I'll help by sharing the steps starting from setting up your loan account to creating bills. However, I highly suggest having this checked with an accounting professional since we'll be doing journal entries, and to make sure your books are accurate.

 

Set up a liability account.

 

  1. Select Settings ⚙, then select Chart of Accounts.
  2. Select New to create a new account.
  3. From the Account Type ▼ dropdown, select Non-current liabilitiesNote: If you plan to pay off the loan by the end of the current financial year, select Current liabilities instead.
  4. From the Detail Type, select Notes Payable (or Loan Payable).
  5. Give the account a relevant name, like Loan for the business, Loan account, etc.
  6. Select Save and close.

 

Record the money you got from the loan. This step will increase the balance of the loan account and the asset account where you put the loan you got. 

 

  1. Click + New and select Journal entry.
  2. On the first line, select the liability account you just created from the Account dropdown. Enter the loan amount in the Credits column.
  3. On the second line, select the bank/asset account from the Account dropdown. Enter the same loan amount in the Debits column.
  4. Click Save and close.

 

Record the bill you received. Every time you record a bill against the loan account, the loan balance decreases. 

 

  1. Click +New and select Bill.
  2. Select the lending company in the Vendor field.
  3. Enter the Terms, the Bill date, and the Bill no.
  4. On the first line, select the loan account CATEGORY dropdown and enter the amount in the appropriate field.
  5. On the second line, select an expense account to track the interest and enter the amount in the appropriate field.
  6. Click Save and close.

 

Here's an article with a different way to record loan repayments for your additional reference: Set up a loan in QuickBooks Online.

 

Please don't hesitate to reach back out if you need more help tracking your loan. I'll be happy to assist you again. Take care!

amr-ismail-trist
Level 2

I have a loan that I will be repaying in 1 year. I need to make 2 interest payments each for 5%. How do I record the future payments as Bills on QBO? to show in A/P

Thank you for your reply, but I am asking about how can I show future interest payments?

Jovychris_A
QuickBooks Team

I have a loan that I will be repaying in 1 year. I need to make 2 interest payments each for 5%. How do I record the future payments as Bills on QBO? to show in A/P

Hi @amr-ismail-trist. I'm here to provide you more information on how to show future interest payments.

 

In relevant to my peer's response, you can add a new service item manually to show the interest rate at 5%. Then create a recurring bill transaction to show this in your A/P and remind you to pay them, including the interest payment.

 

Here's how:

 

  1. Go to Settings and then select Recurring transactions.
  2. Select Reminder List and then click New.
  3. Choose Bill.
  4. Enter Template name and Type as Reminder, remind 1 or 2 days before the transaction date.
  5. Interval should be Monthly, and you can choose the last (for example) Monday of every 6 months.
  6. Select the loan account in the Category Details and pick the interest payment item in the Item details.
  7. Click Save template.

 

For additional details about creating a transaction and setting a reminder ahead of time, you can refer to this article: Create recurring transactions in Quickbooks Online.

 

I also suggest consulting your accountant for professional advice with recording this type of transaction.

 

If you have other questions in mind about recording loans in QuickBooks, feel free to reach us back. We're always here to help you. Stay safe!

View solution in original post

amr-ismail-trist
Level 2

I have a loan that I will be repaying in 1 year. I need to make 2 interest payments each for 5%. How do I record the future payments as Bills on QBO? to show in A/P

Thank you very much! that answered my question!