Loans and Loan Payments in QuickBooks

So you borrow money to purchase a truck or something else. How do you document the loan and loan payments in QuickBooks? A fellow pool pro asked this question and I thought it was worth sharing with everyone.

This takes just a bit of set up but worth doing so. This is the way that I document loan payments.

I think this will be easier to explain by video: 

Loan Accounts needed in QuickBooks (screenshots below)

1. Loan Name - Account type is “Long Term Liabilities” - Detail type is “Other Long Term Liabilities”
2. Loan Interest Paid Name - Account type is “Expense” - Detail type is “Interest Paid”

Loan Calculator

Google “Loan Calculator” and put in your loan information to see the principal and interest allocations per payment. Here’s an example: https://www.calculator.net/loan-calculator.html

Each time you make a payment, check your payment schedule to correctly allocate how much of the payment goes toward principal and how much goes toward interest paid. 

Make sense?

Comment below or Message me if you have questions.