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laevans
April 7, 2025
Question

How to record funds moved from a line of credit to the bank account

  • April 7, 2025
  • 2 replies
  • 0 views

We recently opened a line of credit for $450k. I created a new account in Quickbooks, listing it as Other current liabilities > Line of Credit and entered the balance as $450k.

 

However, when I tried to record a Transfer of $130k from the LOC to the bank account, it added $130k to both the bank balance and to the LOC balance, making the LOC balance $580k instead of subtracting the 130 from the available line and making it $320k.

 

Should the opening balance have been recorded as -$450k instead? Or should the transaction be a journal entry instead of a transfer?

2 replies

S
SashaMC
April 7, 2025

Welcome to the QuickBooks Community, laevans.

 

Thanks for dropping by! For this situation, it would be best to consult your accountant about the best fit for your business. If you don't have an accountant, no worries! We offer a ProAdvisor service where you can connect with an expert in your area. Simply enter your zip code and choose who you think meets your needs. Please know some even offer a free consultation! 

 

 

Please let me know if you have any other questions or concerns! My team and I are looking forward to helping you. Take care. 

 

 

Rainflurry
Rainflurry
April 7, 2025

@laevans 

 

When you open a LOC, there is no opening balance.  After your first draw of $130K, the LOC and bank account should both increase by $130K.  Your LOC will only ever have a $450K balance if you draw on the LOC to $450K without making a payment.    

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