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R
RYNT
December 30, 2022
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Recording a partial invoice payment while the rest of the invoice amount goes towards a loan payable.

  • December 30, 2022
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Hello.  I need help.  I have 2 businesses where we pay and invoice each other in house.  So Business B took a loan from business A.   Business B invoices A and receives payments for services monthly.  As an example say the invoice is a total of $60,000.  Business A writes a check for $40,000 to pay the invoice while the rest of the $20,000 goes towards the loan that B owes A.  So that way we don't have to write multiple checks.  Can someone please tell me how I would record this the correct way into Quickbooks DESKTOP?   

 

 

Best answer by Rainflurry

@RYNT 

 

Make two journal entries (Company > Make General Journal Entries)

 

1) In Co. A, debit Accounts Payable for $20K and credit the Note Receivable from Co. B for $20K.  Make sure to put Co. B in the Name column on the A/P line of the journal entry.  This reduces the note receivable from Co. B and creates a $20K credit that can be applied to the $60K bill from Co. B, leaving only $40K due. 

2) In Co. B, debit the Loan Payable to Co. A for $20K and credit Accounts Receivable for $20K.  Make sure to put Co. A in the Name column on the A/R line of the journal entry.  This reduces the loan payable to Co. A and creates a $20K credit that can be applied as payment to the invoice.

 

Now, when you go to pay the bill in Co. A, you should have a $20K credit showing.  Apply that to the bill and write a check for the remaining balance due of $40K.  When you receive the payment in Co. B, you should have a $20K credit that can be applied to the invoice, along with the $40K check to total the amount due of $60K.  You should also now show a balance of $40K on the note receivable in Co. A and a $40K balance on loan payable in Co. B.

 

 

1 reply

Rainflurry
RainflurryAnswer
December 31, 2022

@RYNT 

 

Make two journal entries (Company > Make General Journal Entries)

 

1) In Co. A, debit Accounts Payable for $20K and credit the Note Receivable from Co. B for $20K.  Make sure to put Co. B in the Name column on the A/P line of the journal entry.  This reduces the note receivable from Co. B and creates a $20K credit that can be applied to the $60K bill from Co. B, leaving only $40K due. 

2) In Co. B, debit the Loan Payable to Co. A for $20K and credit Accounts Receivable for $20K.  Make sure to put Co. A in the Name column on the A/R line of the journal entry.  This reduces the loan payable to Co. A and creates a $20K credit that can be applied as payment to the invoice.

 

Now, when you go to pay the bill in Co. A, you should have a $20K credit showing.  Apply that to the bill and write a check for the remaining balance due of $40K.  When you receive the payment in Co. B, you should have a $20K credit that can be applied to the invoice, along with the $40K check to total the amount due of $60K.  You should also now show a balance of $40K on the note receivable in Co. A and a $40K balance on loan payable in Co. B.

 

 

    R
    RYNTAuthor
    January 2, 2023

    THANK YOU THANK YOU THANK YOU!!!  That worked!  That was exactly what I needed.  I knew there was a way and I just was unsure how to do it.  I truly appreciate your help!  Thank you again.

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