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ABC Accounting Group
ABC Accounting Group, Financial Advisor
Category: Finance
Satisfied Customers: 185
Experience:  Accounting Manager
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I want to how to journalize this problem in QB the company

Customer Question

i want to how to journalize this problem in QB
the company got a line of Credit , which we used to purchase an Airplane
Shareholders borrowed from the same line of credit to use for their shares
Now I have set up as
to record Line of credit received
Bank D/R
LOC C/R as a long term liability
to record purchase of Airplane
Bank C/R for payment
Investment D/R Fixed Asset
to record loan to share holders I recorded as
Due from shareholder D/R other asset
Loan Payable C/R other liabilities
now my problem is when the shareholder payback
I record it as
Bank D/R
due from shareholder C/R
so my question what happens to the account Loan payable what do I apply that against?
Submitted: 2 months ago.
Category: Finance
Expert:  ABC Accounting Group replied 2 months ago.

Hi. Great Question. You lower the Loan Payable when you pay back the line of credit:

For example, paid $450 as monthly payment on loan:

D/R Loan Payable (principal amount paid)

D/R Interest Expense (interest part of what paid)

C/R Bank

Customer: replied 2 months ago.
I think then I have double entry.
because when we received LOC I booked as d/r bank c/r LOC as Liability
when loan to shareholders I booked as D/R due from shareholder C/R loan Payable as a liability
when we pay LOC I book as D/R LOC and C/R bank
when shareholders pay back I book as D/R bank and C/R due from shareholder
leaving me with loan payable still open, what im I missing
Expert:  ABC Accounting Group replied 2 months ago.

Hi.

I think I know what is missing -

The loan to the shareholders should be:

D/R Receivable (Loan to Shareholder)

C/R Cash (Bank)

When shareholder pays you back:

D/R Cash(Bank)

C/R Receivable (Loan to Shareholder)

C/r

Best Regards.

Expert:  ABC Accounting Group replied 2 months ago.

Loan to Shareholder ='s Due from Shareholder - both a Receivable account.

Expert:  ABC Accounting Group replied 2 months ago.

Hi. If you are satisfied with the response and do not have any questions, a positive rating is very much appreciated. Best Regards.

Expert:  ABC Accounting Group replied 2 months ago.

Hi. If you have any questions, please let me know. If not, a positive rating or an acceptance of the answer is very much appreciated. Thank you.

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