Jump to content
Guest

How to enter a loan?

Recommended Posts

Guest

My company made a loan to another company, and I am puzzled over how to record the payment out and then the repayments made in Quickbooks. I tried searching, and all I find is references on how to record a loan where funds come in to your company. As a guess, I created a new "Other Current Asset" account and assigned the payment out to that account. But then when the payments come in, how do I record them so they apply correctly against the asset?

Share this post


Link to post
Share on other sites

That's exactly right. Use a current asset account (or long-term asset) when you give the money out. When you receive money back, use "Make Deposits" to record the amount and apply it back against that same account. Do NOT use "Receive Payments" or any other customer screen!

Share this post


Link to post
Share on other sites

I agree with what Deb said previously. The difference between a "current asset" and "long term asset" is that a current asset is less than one year and a long term asset is greater than one year.

 

I am assuming that you have a Promissory Note for the loan, which also mentions the interest rate, which is signed by the Borrower stating that they "promise to pay" back the loan.

 

When you receive payment you will enter the payment in the "Make Payments" section of QuickBooks. You will need to enter the principal amount received using the asset account that you created for the loan. Then you will enter the interest paid on the loan using the "Interest Income" account. When the load is paid off, you will need to mark the Promissory Note "paid" and send it to the Borrower (the company/person that the funds were loaned to). [i would keep a digital copy of the Promissory Note marked paid and write on it the date the original was sent to the Borrower.]

Share this post


Link to post
Share on other sites
Guest

Thanks, Linda, your explanation is also helpful. The loan was to my sister, and I'm not charging interest (I don't care to profit off of my loved ones, and at today's interest rates I'm not losing anything by loaning out the funds) but it's good to know how that would be recorded. It is less than a one year repayment term, so I'm also glad to learn the difference between a "current" asset and a "long term" asset, and to know I made the right choice in creating the account.

 

So many smart people on this forum who are willing to share their knowledge...I love this place!

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Want to Become a VA?
    Invest in The VAC!
    How Do YOU Startup A



    Are You a VAinsider?
    Virtual Assistant Organization Association
    Upgrade Your FREE Account & Receive Today...
    * Access to Our Job Board *
    * VA Training Tracks*
    * Group Coaching *
    * Private Mastermind Area *
    * Business Templates *
    * Contracts & Forms*
    *Checklist & eBooks *
    * Seminar Archives *
    * Plus VAinsider Perks! *
    UPGRADE HERE

    Virtual Assistant Organization Association





    HootSuite - Social Media Dashboard


    Click to see your AD here!


    Cool Virtual Assistant of the month!

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.