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melissanne
Jul 31, 2023 9:23 AM UTC
Question

How to set up a loan liability with accruing interest etc.

I have arranged a finance loan where I have 12 months @ 0% interest, then interest @ x% will be added. There will be automatic monthly payments taken after this period. How to I set up this liability? I see that QB Desktop had a Loan Manager that would have done this, but I'm using QB Online. Setting up a new Chart of Accounts non-current liability doesn't seem to factor in interest etc. 

1 reply

GeorgiaC
Jul 31, 2023 1:10 PM UTC

Hi melissanne, thanks for posting on the Community.


There's no Loan Manager feature in QuickBooks Online and it's no possible to set the liability account to automatically accrue interest. 

 

Instead, you can record the added interest by creating a journal entry (+ New > Journal entry). On one line, enter the non-current liability account, and on the second, enter the interest account, then enter the total amount in the credit and debit fields. You can create an account for interest by navigating to your Chat of accounts > New > On the panel that appears, set the following: Account type - Expenses > Detail type: Interest paid, then complete the other fields as you see fit. 

 

If you're using QuickBooks Online Plus or Advanced, you can select + New > Journal > Make recurring (on the bottom toolbar) so that QuickBooks automatically creates all future journals for this for you. 🙂

 

 

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