Converting loan to payment of invoice

Hi MrMiyagi,

Thanks for posting in the Community!

This depends on how you've recorded the loan amount in QuickBooks Online. I would recommend reaching out to your accountant to guide you on what's best to record the loan amount.

In QuickBooks you can record the loan amount under a liability account.

 

1. From the Accounting tab, select Chart of accounts.
2. Click New.
3. From the Account Type ▼ dropdown, select Non-current liabilities.
4. On the Detail Type, select Notes Payable (or Loan Payable). Give it a Name.
5. In the Unpaid balance field, enter the amount in the account, and determine the as of date.
6. Click Save and Close.

When you're ready to pay the loan amount. Use the Expense transaction to record them.

1. From the + New tab, select Expense.
2. Go to the Category details section.
3. On the first line, under Category, select the liability account.
4. On the second line, select the expense account for the interest from the Category dropdown.
5. On additional lines, add any additional fees.
6. Select Save and close.

Then, to close the invoice you can record invoice payment through + New, and click Receive payment.

You can check this link to learn more about Set up a loan in QuickBooks Online.

Feel free to post your concerns in the Community or click the Reply button for follow-up questions. We'll be happy to help. Have a good day!