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Frieaza
February 22, 2024
Solved

loan journal entries

  • February 22, 2024
  • 2 replies
  • 0 views

Hello,

@Rainflurry

My company received a $159,400 loan with $46.49 interest and I want to record it using journal entries. Can I proceed as follow:

 

Loan received

Debit:  Bank account 159,400

         credit : loan account  159,400

 

Loan repayment

Debit: loan account 159,400

         Credit: bank account 159,400

 

Loan interest

Debit: interest expense account 46.49

         Credit: loan account 46.49

 

Interest payment

Debit: loan account 46.49

        credit bank account 46.49

 

Thanks

Best answer by Rainflurry

@Frieaza 

 

"Loan received

Debit: Bank account 159,400

credit : loan account 159,400"

 

Looks good.

 

"Loan repayment

Debit: loan account 159,400

Credit: bank account 159,400"

 

There's no need to use a journal entry (JE).  Writing a check from your bank account in QBD does the same thing.  This obviously records a single payment paying back the entire loan balance. 

 

"Loan interest

Debit: interest expense account 46.49

Credit: loan account 46.49

 

Interest payment

Debit: loan account 46.49

credit bank account 46.49"

 

There's no need to put this charge into the loan balance (JE #1) and issue a separate payment (JE #2) unless you need to record a timing difference for the $46 (interest charge on one date and payment on a different date).  Again, there's no need to use a JE for the interest payment.  Writing a check from your bank account does the same thing.

2 replies

S
ShyMae
February 22, 2024

Hello there, Frieaza. I see that you've posted the same concern twice.

My colleague JaeAnnC has already responded to your inquiry. She has also provided an alternative way to set up a loan and repayments in QuickBooks Desktop.
 

You can review my colleague's response through this link: 
https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/re-loan-journal-entries/01/1400850#M211017
 

I'm still all ears if you require further assistance and clarifications about using journal entries. Please let me know by tapping the reply button below. I'll always have your back.

Rainflurry
RainflurryAnswer
February 23, 2024

@Frieaza 

 

"Loan received

Debit: Bank account 159,400

credit : loan account 159,400"

 

Looks good.

 

"Loan repayment

Debit: loan account 159,400

Credit: bank account 159,400"

 

There's no need to use a journal entry (JE).  Writing a check from your bank account in QBD does the same thing.  This obviously records a single payment paying back the entire loan balance. 

 

"Loan interest

Debit: interest expense account 46.49

Credit: loan account 46.49

 

Interest payment

Debit: loan account 46.49

credit bank account 46.49"

 

There's no need to put this charge into the loan balance (JE #1) and issue a separate payment (JE #2) unless you need to record a timing difference for the $46 (interest charge on one date and payment on a different date).  Again, there's no need to use a JE for the interest payment.  Writing a check from your bank account does the same thing.

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