Loan Repayments
Alicia_9236908
Member Posts: 7 ✭
Hi there, I am trialling Reckon One and want to know how to record a loan repayment. I entered a loan repayment as an expense account but it doesn't come off my loan which I made a liability account. If I put the payment against the loan account it comes off the loan amount but doesn't come off my bank balance???? Any help with this is appreciated. Thanks
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Comments
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You need to set up the liability account for the loan first. Then you can do a transfer from the bank account to the loan (liability). When interest is charged, then you include that as an expense for the loan liability account.0
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Thanks for your help. I have set up the loan as a liability in the Chart of Accounts. Is this correct? Or should I open it as a bank account liability?0
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If it is with a bank then set it up as a bank account liability If not set it up as a liability0
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As far as I can tell I have set up the loan properly and when I make a payment I am posting to the liability account and its coming off the loan total but its not showing as an expense?0
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Thank you, I really do appreciate your help but I don't think I'm explaining myself too well. I've made a payment and posted it against my loan (liability) when I check the banking it shows as a payment and the bank account balances. When I run a P & L it doesn't show up as an expense therefore giving a different balance. Having said that, when I run a balance sheet it shows the payment has reduced the amount of my loan. Hope this makes sense. Thanks again
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The loan repayment is not an expense by itself It is the interest that is an expense.1
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Ahhh thank you, that is what was confusing me as I assumed it would be an expense as its coming out of my account. Thanks again for all your help Kevin & Michael0
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Thanks Kevin, I have a very small online business that is more like a hobby, the loan is a small amount of money I lent to the business to get started so there is no interest and if it doesn't get repaid it doesn't matter. I don't take a wage I just do it for fun.
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If you are a sole trader, then it is not really a loan rather an equity injection. If you have a company or trust then it would be a loan1
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Thanks for the info, I will look into that0
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