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KristyM2221
February 20, 2023
Question

Adding a credit to liability loan

  • February 20, 2023
  • 2 replies
  • 0 views

We have a company vehicle we purchased, and our lender has applied a credit on our statement. "Refund Sales Tax Overage". How would I go about recording that as our balance is off by that amount.

 

Thank you in advance!

2 replies

DHeraV
DHeraV
February 21, 2023

Welcome to the Community, @KristyM2221.

I'm here to provide information about how to record the credit on your liability account in QuickBooks Online (QBO).

To ensure that this gets sorted out. You can record a deposit under the affected account to correct its balance. Let me guide you on how:
 

  1. On your QBO account, go to the +New, then select Bank Deposit.
  2. In the Account dropdown, choose the bank account you want it to be deposited.
  3. Under the Received From column, select the vendor/customer you got the refund from.
  4. In the Account dropdown, choose the affected account. If you're not sure please refer to an accountant.
  5. Continue to enter the necessary information.
  6. Once ready, click on Save and close.

 

For detailed information, kindly visit: Record and make bank deposits in QuickBooks Online.

On the other hand, you can also create a Journal Entry to set credit for your liability account. Here's how:

  1. On your QBO account, go to the Accounting tab, then locate and select your liability account.
  2. Click on View register, then on the upper left of the page, select Add journal entry.
  3. Choose the other affected account in the Account drop-down, then enter the amount in the Decreased column. Tip: Refer to your accountant for right account to use.




Moreover, I'll also share this article that can serve as your reference if you want to learn how to record a loan in QuickBooks Online: Set up a loan in QuickBooks Online.


Don't hesitate to leave a reply if you require further assistance with recording credits in QBO. The Community team always has your back. Have a good one!

Rainflurry
Rainflurry
February 21, 2023

@KristyM2221 

 

Record a journal entry.  Debit the loan payable account and credit the same account that was assigned to the sales tax portion when the vehicle was purchased.  If the sales tax was capitalized into the cost of the vehicle's fixed asset account (that's the proper way to have done it), credit that account.  If it was expensed, credit the expense account.

 

@DHeraV's advice is incorrect.  That will increase your loan payable balance and will put cash into your bank account.

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