recording loan payment in quickbooks

[KellyG]

Just wondering what procedure to use in quickbooks to write a check to repay a personal loan. Would I call them "a vendor" and repay it as "a bill"?

[Joe Williams]

Create them as an Other Name and a liability account named "Loan from ..." and then use a check to the Other Name using the liability account.

[Lyle Workman]

If it is a personal loan, and totally not for your business, you should make the payments through your personal accounts. If a business loan, run it through QB as Mr. Williams suggests.

Always keep you business and personal bookkeeping separate.

[bimmer84]

Originally Posted by Joe Williams

Create them as an Other Name and a liability account named "Loan from ..." and then use a check to the Other Name using the liability account.

I am in the process of setting up my first loan, and so I did some searches and found this thread. What I have done so far is to go to my test environment and set up a new "loan" account within my chart of accounts. By selecting "loan" on the first screen it automatically populated the next screen and called the account type a "Other Account Liability". Is that the same as an "Other Name" as suggested above (I'm on QB 2012 Premier)?

I think I understand the rest of this advice in that I would go into that new liability account and increase it by the initial loan amount with the target account being my Cash Account/Checking Account. Then as I pay off the loan, any interest charge would go to an Expense account for bank interest fees, and any principal would be paid out to the liability account.

Am I on the right track? All of this seems to react correctly in the Balance Sheet. Any other advice? Thanks for your help!

[Joe Williams]

Sorry, I meant a new account for the loan, and a new Other Name for the OWNER if you do not have them already entered! Getting old I guess!!!