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jeffyg73
November 21, 2019
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Mortgage payments recorded as expense

  • November 21, 2019
  • 1 reply
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I have a client who's been recording their mortgage payments as an expense for years. In 2018, there was a 3 month period that they recorded the amount due as AP but then recorded the payment as an expense leaving an AP balance of $28K. The balance was paid but recorded as an expense. How do I clean this up so there's no AP balance going forward? 

Best answer by IamjuViel

Hello, @jeffyg73.

 

You can create a journal entry to clear the Account Payable (A/P) balance.

 

Here's how:

  1. Click the Plus sign (+).
  2. Choose Journal Entry.
  3. In the Journal Entry window, change the date if necessary.
  4. In the Account field, choose the right debit account from the drop-down list.
  5. Enter the amount in the Debit field.
  6. Tab to the name field and select the correct credit account from the drop-down list.
  7. In the next row, choose the off-setting or the clearing account in the Account field.
  8. The amount in the Credit field should be equal to the amount in the Debit field.
  9. Click Save & Close.

You can check this article for more detailed steps: Create a journal entry.

 

Once you've created the journal entry, apply it to the existing balance by creating an expense transaction.

  1. Go to the Expenses menu.
  2. Select the Vendors tab.
  3. Search for the vendor's name.
  4. Look for a Bill to pay.
  5. Click the Make Payment button.
  6. Mark the Bill and the Journal Entry to link them.
  7. Click Save and Close.

Meanwhile, I've got this article on how tracking loans and its payments work in QuickBooks: Record a loan and its payment.

 

Feel free to visit us here in the Community if you have other questions. I'm always here to help.

1 reply

IamjuViel
IamjuVielAnswer
November 21, 2019

Hello, @jeffyg73.

 

You can create a journal entry to clear the Account Payable (A/P) balance.

 

Here's how:

  1. Click the Plus sign (+).
  2. Choose Journal Entry.
  3. In the Journal Entry window, change the date if necessary.
  4. In the Account field, choose the right debit account from the drop-down list.
  5. Enter the amount in the Debit field.
  6. Tab to the name field and select the correct credit account from the drop-down list.
  7. In the next row, choose the off-setting or the clearing account in the Account field.
  8. The amount in the Credit field should be equal to the amount in the Debit field.
  9. Click Save & Close.

You can check this article for more detailed steps: Create a journal entry.

 

Once you've created the journal entry, apply it to the existing balance by creating an expense transaction.

  1. Go to the Expenses menu.
  2. Select the Vendors tab.
  3. Search for the vendor's name.
  4. Look for a Bill to pay.
  5. Click the Make Payment button.
  6. Mark the Bill and the Journal Entry to link them.
  7. Click Save and Close.

Meanwhile, I've got this article on how tracking loans and its payments work in QuickBooks: Record a loan and its payment.

 

Feel free to visit us here in the Community if you have other questions. I'm always here to help.

    J
    jeffyg73Author
    November 21, 2019

    Thank you! What date should I use if the transactions occurred in July 2018? 

    C
    ChristieAnn 11
    November 21, 2019

    Hi there, jeffyg73.

     

    I suggest setting the date to 2019 for the JEs you created to take effect today. Otherwise, select 2018 if you want the transactions to affect your 2018 books.

     

     

    Please check this article on how to ensure that your total debits in the general ledger equal the total credits by entering adjusting journal entries to review the Adjusted Trial Balance report: Enter Adjusting journal entries.

     

     

    Please know that you're always welcome to post if you have any other concerns. Wishing you and your business continued success.​

     

     

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