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sb-alehzayis
June 16, 2020
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Recording a loan we gave

  • June 16, 2020
  • 1 reply
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How and where do I record a loan we gave someone?

I'm specifically asking about a loan we GAVE, not one we received.

    Best answer by Ashley H

    Good evening, @sb-alehzayis.

     

    Let's get this loan recorded into your QuickBooks Desktop. This type of loan is considered a Loan Receivable since it's a loan given and not taken. I'm here to show you how to get everything set up to have all of the proper recordings.

     

    We can start by creating the Loan account. I've provided the steps below on how to do this with ease:

     

    1. Go to Lists in the top menu, then Chart of Accounts.
    2. Click on the Account button and press on New.
    3. Select the Type according to the payment plan. 
      • Other Current Asset: If the loan is scheduled for repayment over this year.
      • Other Asset: If the loan should be paid during the current year.
    4. Hit Continue. Complete the details for the loan. 
    5. (Optional) Add a Description and whether it is a sub-account of another account. You can also select the Tax Line drop-down menu to choose a tax form to associate with the account. Enter an amount into the Opening Balance field and press OK.

     

    After creating the account, then you can record the loan payments. Here's how:

     

    1. Go to the Banking tab in the top menu, then Make Deposits.
    2. Select a payment you want to associate with the account if the Payments to Deposit window opens. If the Make Deposits window opens, enter the name of the customer paying off the loan in the Received From column.
    3. Choose the Asset Account you created for the loan in the From Account field.
    4. Enter the customer's payment in the Amount column.
    5. Add the customer's name again in the Received From column.
    6. Pick the account you use to track interest income into the From Account field.
    7. You can enter any part of the payment that goes to the interest in the Amount column. You may use the Interest Income account listed under Other Income type unless you have a specific account to track interest for this loan.
    8. Hit Save and close.

     

    That's all there's to it! This is how you can record and keep track of the Loan Receivable in QuickBooks Desktop.

     

    If you have any additional questions or concerns, please don't hesitate and reach back out to me. Have a great day.

    1 reply

    Ashley H
    Ashley HAnswer
    June 16, 2020

    Good evening, @sb-alehzayis.

     

    Let's get this loan recorded into your QuickBooks Desktop. This type of loan is considered a Loan Receivable since it's a loan given and not taken. I'm here to show you how to get everything set up to have all of the proper recordings.

     

    We can start by creating the Loan account. I've provided the steps below on how to do this with ease:

     

    1. Go to Lists in the top menu, then Chart of Accounts.
    2. Click on the Account button and press on New.
    3. Select the Type according to the payment plan. 
      • Other Current Asset: If the loan is scheduled for repayment over this year.
      • Other Asset: If the loan should be paid during the current year.
    4. Hit Continue. Complete the details for the loan. 
    5. (Optional) Add a Description and whether it is a sub-account of another account. You can also select the Tax Line drop-down menu to choose a tax form to associate with the account. Enter an amount into the Opening Balance field and press OK.

     

    After creating the account, then you can record the loan payments. Here's how:

     

    1. Go to the Banking tab in the top menu, then Make Deposits.
    2. Select a payment you want to associate with the account if the Payments to Deposit window opens. If the Make Deposits window opens, enter the name of the customer paying off the loan in the Received From column.
    3. Choose the Asset Account you created for the loan in the From Account field.
    4. Enter the customer's payment in the Amount column.
    5. Add the customer's name again in the Received From column.
    6. Pick the account you use to track interest income into the From Account field.
    7. You can enter any part of the payment that goes to the interest in the Amount column. You may use the Interest Income account listed under Other Income type unless you have a specific account to track interest for this loan.
    8. Hit Save and close.

     

    That's all there's to it! This is how you can record and keep track of the Loan Receivable in QuickBooks Desktop.

     

    If you have any additional questions or concerns, please don't hesitate and reach back out to me. Have a great day.

      J
      JnormL
      November 15, 2022

      This is helpful, but how do we record the original transaction when we extended the loan to the customer. The money left Bank account A and went to the customer. How is that recorded? Thank you!

        MJoy_D
        MJoy_D
        November 15, 2022

        I can show you how to record the customer loan in QuickBooks, @JnormL.

         

        You can record the loan to the customer by writing a check. Follow the steps below:

         

        1. Select Banking then Write Checks.
        2. Select the Bank Account you want to use to pay the loan.
        3. In the Pay to the Order of field, select the name of the bank.
        4. Provide all the necessary information.
        5. Select Save and close.

         

        For more information about tracking cash and non-cash asset loans, refer to this article: Manually track loans in QuickBooks Desktop. This will also guide you to track interest payments or fees.

         

        To see other loan options and to see what else you can do with your loan in different scenarios, use the What If Scenarios tool in the following article: QuickBooks Loan Manager.

         

        Let me know if you still need help recording your customer loan and payments. I'm always here to assist. Have a great rest of the day!

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