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gemada
August 13, 2021
Solved

how to enter bill/payment that was paid from proceeds of a sale

  • August 13, 2021
  • 2 replies
  • 0 views

Hi everyone;

 

I recently received repayment for a loan (500k) I made to a business. It was done in trust through lawyers who held the money in trust and withheld some funds to cover their fees. The lawyers then submitted an invoice to me but marked it as paid. So basically let's say the funds sent to my lawyers by the debtor were 500k, I received 490k deposit in my bank from my lawyers, and the lawyers kept 10k for their fees. How do I handle this in QB? I think I need to use journal entries but require some guidance. Thanks!

Best answer by PrachiJoshi

Hello Gemada,

 

You are right. It needs a journal entry. First thing to check is if you have the loan as $500k as asset on your balance sheet. If you do, you will make the following entry:

 

DR Bank 490,000

DR Legal expesnes 10,000

   CR Loan 500,000

 

You can also attach the lawyer's bill to the journal entry. If you have paid sales tax, please use appropriate sales tax code in the journal entry.

 

If you do not have the loan as an asset on your balance sheet, please speak to an accountant.

 

Thanks

Prachi

2 replies

L
LauraAB
August 13, 2021

Hello gemada,

 

Thanks for taking the time to outline your situation. I see how this kind of thing might be a bit complicated to record, so I appreciate double checking and seeking some guidance on this. I'd be happy to help point you in the right direction for working through this situation.

 

My biggest recommendation here is to consult an accountant. Because the transaction involves an initial loan, repayment of said loan, and then a payment to the lawyers for their fees, there are several moving parts that you'll want to make sure you account for.

 

While you may receive insight from other users here in the QuickBooks Community, to work with an accountant, you can use the My Accountant tab in QuickBooks Online. There, you can invite your accountant as a user to your books or you can take advantage of the Find a pro to help button to see our directory of QuickBooks-certified professionals in your area.

 

Don't hesitate to visit us in the QuickBooks Community again if you have questions in the future. We're here to help!

PrachiJoshi
PrachiJoshiAnswer
August 13, 2021

Hello Gemada,

 

You are right. It needs a journal entry. First thing to check is if you have the loan as $500k as asset on your balance sheet. If you do, you will make the following entry:

 

DR Bank 490,000

DR Legal expesnes 10,000

   CR Loan 500,000

 

You can also attach the lawyer's bill to the journal entry. If you have paid sales tax, please use appropriate sales tax code in the journal entry.

 

If you do not have the loan as an asset on your balance sheet, please speak to an accountant.

 

Thanks

Prachi

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