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Linda48328
January 9, 2024
Question

Loan repayments

  • January 9, 2024
  • 1 reply
  • 0 views

Our HOA has a loan that I set up as a liability account. 

When making loan payments, the liability is reduced and the interest amount is showing as an expense on the Balance sheet and P&L

This is my question, shouldn’t the full amount of the loan payment show somewhere as an expense? 
When making the annual budget, I have to use the full payment amount, not just the interest.
Please help, I’m confused.

 

    1 reply

    R
    RCV
    January 9, 2024

    Let me share some information on how to properly record loan repayments in QuickBooks Desktop, Linda48328.

     

    You're doing the right thing. When recording a loan in QuickBooks, you need to select a liability account for it. Then, create an expense account so you can track interest payments or fees and charges. Also, QuickBooks records the payment for the principal amount as a deduction to the liability account. Once you complete all the payments, the value of the liability account will turn to zero. Then, QuickBooks records the interest payment as a company expense.

     

    If you haven't created an expense account so you can track interest payments or fees and charges, just follow the steps below:

     

    1. Go to the Lists menu, then select Chart of Accounts.
    2. Right-click anywhere, then tap New.
    3. Choose Expense, then Continue.
    4. Enter the account name for the interest payments or fees and charges.
    5. Press Save & Close.

     

     

    Once done, record the loan amount since you have a liability account for the loan. Just follow Step 4 in this article: Manually track loans in QuickBooks Desktop. 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: QuickBooks Loan Manager.

     

    I'm just one post away if you need help recording your loan and payments. I'm always here to assist. You have a good one. 

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