Loans and Interest from partners

Hi Marianne,

Making sure you're recording the loan the right way is good method for preventing errors in your books. I'll be happy to share more info on this so you can get back to doing what you enjoy the most. 

QuickBooks is designed to help simplify most of the manual calculations involved in your business. Based on what you've described, I recommend creating a journal entry to record the loan. Prior to creating the journal entry, make sure you have an expense account for the interest and a liability account (Other Current Liability for short-term loans payable over one year and Long Term Liability for long-term loans payable over a longer period).

If you don't have these accounts, here's how you can create them: 

1. On the QuickBooks homepage, go to the Lists menu.
2. Select Chart of Accounts.
3. Go to the Account drop-down arrow and select New.
4. Select Expense for the expense accounts and Other Account Types for the loan liability (select either Other Current Liability or Long Term Liability).
5. Click on Continue.
6. Fill in the necessary information.
7. Click on Save and close.

After, record a journal entry.

1. Click on the Company menu.
2. Select Make General Journal Entries.
3. Add the entry date.
4. Enter the correct account on your entry debits to your expense accounts (truck and interest) and credits to your loan account created.

With this info, I highly recommend reaching out to your accountant for expert advice. If you're not in contact with one, I encourage you to search for one on our website using this link here.

I'll also leave this question here so other accounting professional members can chime in. Let me know if you have other questions. I'm here to help.