How should a Line of Credit be set up? It is currently set up as a credit card with bank trans. dowloaded but I can't reconcile due to interest & principle payments.

@pinebluffpool 

A LOC should be an 'Other current liability' account.  When you draw on the LOC, create a deposit into your bank account and select the LOC liability account as the category.  When you make payments, create a check and assign the principal portion to the LOC liability account and the interest portion to Interest Expense.  That will allow you to match the draws to the deposits and the payments to the checks in QB.  If you don't create the payment/check transaction prior to downloading your bank transactions and you add the transaction from the download, you will need to go back and break out the interest and principal portions.     

Hello, pinebluffpool! Thank you for reaching out to us regarding your line of credit set up in QuickBooks Online (QBO). I'm here to help you do it the right way, so you can easily reconcile and manage your transactions.

I agree with @Rainflurry. To set up a line of credit, you need to create two types of accounts: a liability (Other Current Liability) account to track the principal amount and an expense account to monitor the interest charges. 

Add a liability account for the principal where you record the transaction as a bill or expense when paying for things with your line of credit. Follow these steps to complete the process:

1. Go to Settings or the Gear icon and select Chart of accounts.
2. Select New.
3. Enter a name in the Account name field.
4. From the Account type dropdown, choose Other Current Liabilities.
5. Pick Line of Credit in the Detail type dropdown.
6. Hit Save. 

On the other hand, once you incur interest charges, track your paid interest using the expense account. Here's how to set this up:

1. Go to Settings or the Gear icon and select Chart of accounts.
2. Click New.
3. Enter a name in the Account name field.
4. In the Account type dropdown, pick Expenses.
5. Choose Interest Paid from the Detail type dropdown.
6. Hit Save. 

Right after, record an expense entry (for example, check f you’re going to send the bank or creditor a paper check) and then match it to your downloaded transactions. This way, you're able to reconcile your account. For the complete guide about setting up a line of credit in QBO, please see this article: Manage a line of credit.

Once you're all set, reconcile your account to ensure the accuracy of your financial data.

Additionally, have you had a chance to get in touch with our QuickBooks Live Expert Assisted team? They specialize in simplifying revenue and financial management just for you. I encourage you to explore their services, as their expertise could be a valuable resource for all your accounting needs!

It's my pleasure assisting you, pinebluffpool! I'm looking forward to your return to the Community whenever you need support with tracking a line of credit in QuickBooks. Feel free to reach out anytime. Wishing you a wonderful day ahead!