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NeeNee2022
Dec 5, 2022 8:44 PM UTC
Question

Journal Entry for a loan

I have to do a journal entry for a loan that my boss has had. I have the new account balance and the percentage. How do I go about doing the journal entry and setting up new recurring payments that will account for the principle and the interest? Can quickbooks figure the interest or do I have to figure it each time. I would appreciate anyone's help.

8 replies

LeizylMQuickBooks Team
QuickBooks Team
Dec 6, 2022 2:47 AM UTC

Good day, NeeNee2022. 

 

Let me make it up to you by ensuring you'll be able to record a loan in QuickBooks Online (QBO).

 

To start tracking loans, we'll have to set up a liability and expense account for the loan and interest payments, respectively.

 

  1. Go to Accounting on the left panel.
  2. Within the Chart of Accounts tab, select New to create a new account.
  3. In the Account Type drop-down arrow, select Long-Term Liabilities. From the Detail Type drop-down, select Notes Payable.
  4. Then, Save and close.

 

After that, you'll need to create a check for the loan. I'll show you how:

 

  1. Click the + New button, then select Check.
  2. Choose a Payee, a Payment date, and a Payment method.
  3. From the Payment account drop-down menu, select the bank account.
  4. From the first line, from the Category dropdown, select the account you created to track loans.
  5. On the Amount field, enter the loan amount.
  6. Click Save and close.

 

You can check out this article for more detailed steps: Set up a loan in QuickBooks Online.

 

I also recommend reaching out to your accountant for additional guidance in managing your loans in QBO. Doing so ensures you'll record everything correctly and avoid messing up your books.

 

Should you need any assistance managing your loan payments in QBO. I'm is always here to help.

NeeNee2022Author
Dec 6, 2022 5:06 PM UTC

Also is there a way to do a recurring payment and put percentage in so that it accounts for the reduced interest amount each payment or do I need to just do a new check for each one?

JonpriL
Level 9
Dec 6, 2022 6:46 PM UTC

Hi there, @NeeNee2022!

 

Yes, you can enter and put the principal and loan payment amounts in one check as long as the correct names of categories are used.

 

Kindly read and use this article to learn more about recording a loan payment: Record a Loan Repayment in QuickBooks Online. 

 

Meanwhile, the option to create a recurring transaction using a certain percentage of the loan payment is unavailable. This means we'll have to manually create checks for every payment made to the loan in question.

 

I'm also adding this reference that'll help you understand your account and its transaction history which breaks down how much money you have or owe: The Chart of Accounts in QuickBooks.

 

I've got you covered if you have other questions aside from recording a loan in QuickBooks. Use the Reply option below to leave a comment and don't forget to include my name, @JonpriL. Take care always and stay safe!

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