Hi Insong,

Entering a loan amount or creating a loan account in QuickBooks is not a difficult task, but it is detailed. It takes a number of different steps to enter loan into QuickBooks and forgetting to do just one of them can leave you with an inaccurate balance sheet. While entering the loan in your books you will have to know opening balance, what is the interest payment is going to be and what kind of loan it is, such as current and long term.

Create a Liability Loan Account

1. Open Chart of accounts, you can press “ctrl + A” keys from the keyboard to open a chart of account or from the Lists menu click on chart of accounts.
2. In the chart of accounts screen, right-click anywhere and select
3. In the add new account screen, click the Other Account Types, radio button and from the drop-down click on Other current Liability: (For short- term loans payable over one year), or Long Term Liability,(for long term loans payable over a longer period).
4. Next click on
5. Write the name and the reference number for the account in the applicable fields. Leave the balance at zero. The tax-line mapping can be entered by your accountant later or you can take advice from a certified CPA.
6. Then click on save and close.

After adding a loan account in your Chart of Accounts then you need to create Vendors (Bank/ lending company) the company you need to pay for the loan.

Set up the Vendor:

1. From the vendors menu, click on the Vendor Center.
2. Click a new Vendor.
3. In the new Vendor screen, enter the name of the bank or the company you need to pay for the loan.
4. Enter all the details in the applicable fields.
5. Close the screen by clicking on

Record the Loan Amount:

Cash Loans:

Separate the loan amount in two components, Payment on principal and interest payment.

1. Go to the Banking menu, click make the deposit.
2. Select the proper account for loan repayment and the date of the payment.
3. Fill up the other filed like Deposit to, from an account, amount, memo.
4. Then click on save and close.

Non-Cash Loans:

By creating an Asset account:

1. Open Chart of Accounts.
2. In the Chart of Accounts windows, right-click anywhere and select New account.
3. In the Add New Account screen, choose any of the following asset accounts.
   1. Fixed Asset.
   2. Other Current Asset.
   3. Other Asset.
4. Click on Continue.
5. Enter the name and number for the account and then click on save & Close.

By Entering a Journal Entry

1. Go to the Company menu, then click on Make General Journal Entries.
2. Enter the Date and journal Entry No.
3. In the first line debit the loan asset account.
4. In the second line credit the liability account.
5. Click Save & Close.

Record Loan Payments:

Payment for the principal amount of the loan amount will be recorded as a deduction to the Liability account. Once you have completed all payments, the value of the liability account will be zero and Interest payment will be recorded as a company expense.

1. Click “Banking” on the main menu.
2. Then select “Write Checks” In the Pay to the Order of field, select the name of the bank.
3. Enter the payee name and repayment amount in the Write Checks window.
4. In the detail area of the Write Checks window assign the interest element of the loan repayment amount.
5. Assign the rest of the payment, also known as the principal, to the liability account you created to track the loan.
6. If you want to schedule this payment at regular intervals and issue a payment reminder for the next time, click the “Edit” button and then select the “Memorize Check” option.
7. Click “Save and Close.”