Some companies need to take out a loan from time to time to finance capital projects like new buildings, facilities, or product research & innovation. When your business takes out a loan, you can account for the loan as a liability and monitor each loan amount to reduce the liability. Keep reading this blog to know how to enter a loan in QuickBooks. Setting up a liability account for a short-term or long-term loan in QuickBooks business accounting software to track and record the loan deposit amount and all loan repayments.
Make a Liability Account
Sign in to your account using your QuickBooks online password to build a liability loan account. Then take the following steps:
- In the main menu, pick “Lists.”
- In the context menu, choose “Chart of Accounts.”
- Below the list of accounts, choose the “Account” button.
- From the pull-down menu, select “Fresh.”
- After that, click on the ‘Company Lists’ option and then ‘Chart of Accounts.
- Choose “New” from the context menu after right-clicking on any position on the list.
- To extend the list of available account forms, select “Other” from the accounts list and then click the down-arrow button.
You now have the choice of choosing the loan form. For short-term loans, select ‘Other Current Liabilities’ with a repayment period of one year or less, or ‘Long-term Liability’ for loans with a repayment period of more than one year. Select ‘Continue’ from the drop-down menu. In the relevant fields, assign the accounts a title and a reference number. Remove the balance from the equation and set it to zero. Select ‘Save and Close’ from the drop-down menu. Your loan has been entered into the system.
Also Read: How To Set Up a Loan in QuickBooks?
Make a deposit to enter a loan in QuickBooks
- To deposit the loan number, go to the main screen and pick “Banking,” then “Make Deposits” from the context menu.
- If the Transactions to Deposit window appears, close it by pressing the “Cancel” button.
- In the Make Deposits slot, choose the loan’s deposit account.
- After that, in the “From Account” tab, type the name of the liability account you created to track the loan.
- In the “Number” column, type the loan balance in the field. Select “Save” from the drop-down menu.
Keeping Track of QuickBooks Loan Payments
To assure that the company’s finances are up to date at the end of and fiscal year, it’s a good idea to enter a loan in QuickBooks for payments on a regular basis.
- To do so, go to the main menu and pick “Banking,” then “Write Checks” from the background menu.
- In the Write Checks pane, enter the payee name and repayment sum in the appropriate fields.
- In the Write Checks window’s information section, allocate the interest amount of the loan repayment to your chosen expense account.
- The remainder of the loan, also known as the principal, should be assigned to the liability account you generated to keep track of the loan.
- If you want QuickBooks to register this payment immediately at periodic intervals and issue a payment reminder.
- Click the “Edit” button and then select the “Memorize Check” option.
- To save the payment and close the window, press the “Save and Close” button.
Create an expense in QuickBooks Online for a mortgage payment
- To begin, make an account to keep track of your assets and mortgage payments.
- Pick Cost from the Build menu.
- After that, fill in the Payee area with the name of the company or person who gave you the loan.
- From the Payments drop-down menu, select the bank account that will be used to make the loan payment.
- Then, pick a payment method from the drop-down menu and enter the payment date.
- In the Ref no. area, insert any identifying numbers from the payment receipt.
- To keep track of the loan payment, do the following:
- Pick the account you used to manage the loan from the Section drop-down in the first line.
- Fill out the total amount in the Amount area.
Hopefully, the above-given information is useful for you to get rid of this problem. But if you are still facing any issues with your software and need professional assistance, regarding accounting, bookkeeping & accounting software-related issues then feel free to get in touch with Certified Experts at +1-860-325-4922. The USA-based ProAdvisors will provide all sorts of assistance related to the software 24/7.
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