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accountingatheart
May 6, 2024
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How to record a loan from two different companies

  • May 6, 2024
  • 1 reply
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Hello, 

 

I have a client that got approved for a car loan. He first started with the original company, but then moved to different company. How would I record the loan for the first company and then the second company, which originate from the orignal loan?

Best answer by SarahannC

Hello there, accounting. I'll share some insights on how you can record a loan from two different companies in QuickBooks. 

 

Firstly, you'll create a liability account for the original company. Here's how:

 

  1. Click on the Gear icon and select Chart of Accounts.
  2. Select New to create a new account.
  3. Choose Long Term Liabilities from the Account Type dropdown.
  4. Select Notes Payable from the Detail Type dropdown.
  5. Give the account a relevant name like Loan for a car.

 

To complete the process, you can follow this article: Set up a loan in QuickBooks Online: Learn how to record a loan in QuickBooks Online. 

 

After creating the first liability account, you can move on to setting up another liability account for the second company.

 

Once you've completed this step, you can create a journal entry to record the loan from the two companies. I recommend seeking advice from a certified accountant before proceeding.

 

  1. Click the +New button.
  2. Select Journal Entry.
  3. Enter all the necessary details.
  4. Hit Save and close.

 

You can post a new one if you have follow-up concerns about recording loan in QuickBooks.

1 reply

S
SarahannCAnswer
May 6, 2024

Hello there, accounting. I'll share some insights on how you can record a loan from two different companies in QuickBooks. 

 

Firstly, you'll create a liability account for the original company. Here's how:

 

  1. Click on the Gear icon and select Chart of Accounts.
  2. Select New to create a new account.
  3. Choose Long Term Liabilities from the Account Type dropdown.
  4. Select Notes Payable from the Detail Type dropdown.
  5. Give the account a relevant name like Loan for a car.

 

To complete the process, you can follow this article: Set up a loan in QuickBooks Online: Learn how to record a loan in QuickBooks Online. 

 

After creating the first liability account, you can move on to setting up another liability account for the second company.

 

Once you've completed this step, you can create a journal entry to record the loan from the two companies. I recommend seeking advice from a certified accountant before proceeding.

 

  1. Click the +New button.
  2. Select Journal Entry.
  3. Enter all the necessary details.
  4. Hit Save and close.

 

You can post a new one if you have follow-up concerns about recording loan in QuickBooks.

A
accountingatheartAuthor
May 7, 2024

Hello, 

 

Thank you for replying back to my question. I have only created one liability account. I still a little confused on these steps. How would I transfer the old balance to a new balance? since the old company is not being used. 

Once you've completed this step, you can create a journal entry to record the loan from the two companies. I recommend seeking advice from a certified accountant before proceeding.

 

  1. Click the +New button.
  2. Select Journal Entry.
  3. Enter all the necessary details.
  4. Hit Save and close
S
Shania_C
May 7, 2024

Thank you for getting back, @accountingatheart.

 

I can provide the steps on how to transfer an old loan balance to a new balance in QuickBooks Online.

 

To begin with, you need to create a liability account. Then, you can record the loan received via bank deposit or journal entry. This should increase the balances of the loan account and the asset account, where the actual money is deposited.

 

Here's how to set up a liability account

 

  1. Go to Settings, then select Chart of Accounts.
  2. Click on New.
  3. If the liability is to be paid in full within a year, select Other Current Liabilities. \If it will take more than a year to repay, select Long Term Liabilities.
  4. Name the account suitably. For example: If you’re buying a truck, create an account called Loan - Truck.
  5. Leave the opening balance blank. (Optional) Add a description to add extra information about this account. 
  6. Then click on Save.

 

Here's how to create a journal entry to apply the loan to the proper asset accounts:

 

  1. Click on + New.
  2. Select Journal entry.
  3. Under ACCOUNT, select your new liability account for the first line.
  4. Enter the amount of the loan under CREDITS.
  5. For the next line, select the appropriate asset account under ACCOUNT.

Note: The DEBITS column will be automatically populated based on the amount in the CREDITS column.

     6. Finally, select Save or Save and close.

 

Asset account for the purchase Credit then enter the original value, where payments made as debit and loan payable as debit

 

However, I'd still recommend reaching out to your accountant to have hands-on support from technical and accounting perspectives.

 

Additionally, to help you learn how to record, track, and use loans, you can read through this article: Track customer loans in QuickBooks Online.

 

I’ll be around the corner if you need an extra pair of hands in recording loans or any QuickBooks-related matters. Stay safe!

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