QuickBooks Online 2020 to make loan payments, get ready because it’s go time with QuickBooks Online 2022. Here we are in our get great guitars practice file, we set up with a 30 day free trial holding down control scrolling up just a bit to get to that one to 5% currently and the homepage otherwise known as the get things done page and the business view as opposed to the accounting view,
00:29
if you wanted to change to the accounting view, it’s something you can do by going to the colleague up top and looking at the switch to the accounting view on down below, we will be tracking toggling back and forth between the two views,
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either here or by jumping over to the sample company file, which is currently in the accounting view. Going back on over, we’re going to open up a few tabs by going to the tab at the top right clicking on it, duplicating it. Let’s do it two more times.
00:57
So we can put some reports in these tabs, right clicking on the tab up top, duplicating it one more time, back to the tab to the left, right clicking on it, duplicating it again, jumping over to the sample company file just to note where the reports are located in it. And the accounting view which is on the left hand side straightforward area, they’re back on over to the Business View.
01:25
And it’s still thinking it’s still thinking, there it is. Okay, so when the business overview, and we’re gonna go into the reports, standard reports, close up the hamburger. Go down to the balance sheet, one of the faves, of course, and up top the rain genes they are changing with Oh 101222 1230 122 and run it go into the tab to the right.
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And down to the business overview. Let’s take a look at the reports area standard Tapi and our profit and loss income statement, closing the hamburger ranging and changing Oh 101 to two to 1231 to two run it, go into the tab to the right one more time who know vase boss read business overview and the reports close it up the hamburger
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I’m going to be searching this time for the trusty Trial Balance the T to the B trial balance. There it is opening that up. And then this is just the balance sheet on top of the income statement Oh 101 to two to 1231 to two and run it.
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as well. Let’s go back to the balance sheet tab holding ctrl scrolling up just a bit, and we’re going to go on down to the loan payable we put on the books. So we got the loan payable on the books down here at the 72,000, we’re going to imagine that we’re making payments on it.
03:01
Now, we set up an amortization table last time, which was an exciting process that if you missed that, you’re going to want to take a look at it because it was good times.
03:12
And now we’re going to use that amortization table to record the payments. Now remember, as you record the payments, there’s a couple things you need to keep in mind with regards to the loans. One is that you might have multiple loans, if you have multiple loans,
03:25
then I would recommend having one account per loan, possibly as sub accounts under the loan parent account, and so that you can track the loan balances and tie them out to the amortization table, you also will have to think about short term and long term portion if you’re doing reporting purposes.
03:43
And I would do that periodically at the end of the month or a year recording your balances in one loan account as you’re doing the bookkeeping process. So once again, you can easily tie out your loan balance to the amortization schedules, and also periodically breakout short term and long term portion for financial and reporting needs at the end of the periods.
04:06
So let’s go on over it. Now the other thing we got to keep in mind here is that it’s going to take three accounts to record a loan payment. If we’re going to record it properly, and record the interest,
04:17
it’s possible for you to say hey, look, I’m going to try to do my information on a cash basis, purpose and use at the end of the period the CPA firm or the accounting firm to shore up to to the amortization table. So in other words, we could have an amortization table like this,
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that might come from the financial institution, or it might actually we might create it, or we might get it from our CPA firm or our accounting firm. And these are going to be the payments that are going to happen on it.
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So it’s possible to just say, hey, look, I’m not going to deal with the interest. I’m just going to record cash, cash payments on a cash basis, and that’ll be the easy memorizable transaction.
05:00
lowering cash and lowering the loan balance every time I make a payment. And then periodically at the end of the year, wherever we are at possibly here, by the end of the year or the end of the month,
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I’m going to ask my CPA to make the amortization table such as this, to then calculate what the loan balance should be to break out the interest as of that point in time for the period that has passed and break out the short term and long term portion periodically.
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So that’s one way you can try to make your bookkeeping a little bit faster and memorize these transactions a little bit easier if you’re working with a CPA, or if you wanted to do that on a periodic basis.
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Or you can get your amortization schedule like this from the financial institution, or you can make one or from your CPA and then record your payments in accordance with the amortization schedule, making your Indian loan balance, match or proper after each payment that you are making. That’s what we’ll do here.
05:59
So I’m going to make this first one green, we’ll make this first payment first. And then I’ll make the second payment as of the end of the month, we’re going to imagine that this payment is happening at the beginning of the month, which we’ll put in on our case,
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February 1, and then we’ll make the second payment at the end of the month, just so we can see the two payments, you know, together here and see the difference.
06:21
And kind of the issue with the recording of these payments from the amortization table and why we need the amortization table. Okay, let’s go back on over, that’s not where we’re going. That’s the recording software. There we go.
06:33
Let’s go back to the first tab, hold down Control, scroll down a little bit to the one to five, I’m going to hit the plus button, we’re going to do this with a check form because it’s going to be a decrease to the checking account.
06:43
Remember that if you’re using bank feeds, then you can use the bank feeds on this but it’s a little bit more difficult, because you’re going to have to once the bank feeds go through, typically do that adjustment to it to break out the proper interest. And so let’s see, let’s see how this will look with a standard check type of form. So we’re going to say this is going to go I’m going to say Chase as our bank,
07:04
I’m gonna imagine chases our bank, c h a s e Chase Bank. And so we’ll do that it’s set up. And so that should be good, it’s coming out of the checking account, we’re gonna say this happens on
07:16
Oh, 201 to two, and the check number is correct. So that’s good, the check numbers are lining back up again. And then I’m going to go into the category, not an item down here, but a category. And so we’re going to say that we have interest expense. Now once again, I’m in the business view.
07:34
And this is one of the things that I really am not a fan of with the business view is that they’re not they kind of truncated, the drop down here. And you can have these other windows on the right hand side, it’s a little bit more difficult to add accounts.
07:47
So therefore, I might be jumping back over to the accounting view to do some of this data input. In fact, I think I will jump over to the accounting view to do it, I’m going to right click on the tab up top and duplicate this tab. And just take a look at what this looks like in the accounting view as well.
08:06
And everything else on the on the business view. It’s just a matter of where stuff is located. It’s it’s and so you might prefer the business view, it’s a little bit more compacted, I think it would work well on a tablet as well, which might be but this particular thing is not I’m not a fan of it.
08:24
So I’m going to hit the cog drop down, I’m going to go to the switch to the accounting view, switch into the accounting view. And let’s see what it looks like in the accounting view, hitting the plus button. And I’m going to enter another check. And so let’s do this again. So this is going to be Chase, Chase,
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and I’m going to cash account and this has happened in as of Oh 201 to 210 16 is correct. And then down here you can see the difference in the dropdowns they give you the full list of drop downs they put they still put the expenses up top,
09:01
I would still prefer it to be in order assets liabilities, like the order of the of the but that they give these account the type of account on the left hand side on the right hand side, which that seems very important to me to know what type of account would be useful information. So in any case, we’re gonna have interest expense and see if they gave us an interest interest and they call it interest paid here. Instead of interest expense,
09:28
that I’d rather have it called interest expense personally because interest paid may not be accurate, you might have interest expense that hasn’t been paid because you might have an accrual kind of transaction related to it. I’d also like to change the interest expense possibly to be an other current current expense account. So we might look at that later. I’ll use the account they have here.
09:50
What I won’t do is create another account called interest expense and then cause myself confusion between the two accounts. If I want to change it to interest expense I want to go to that account.
10:00
Typically, and then just change the name, edit it. But we’ll We’ll make do that later. And so then this is going to be for the amount of the $300 for the interest, so 300 on the interest, and not billable or anything like that, and then the other side is going to have to go into the loan account.
10:18
So I’m going to say loan payable. There’s our loan payable, I count. And so we only have one loan on the books. So that should be it. And that is going to be for the amount of the, the 105873105873105 8.73. So there is that. So what is this going to do, then it’s going to decrease the check.
10:47
But by the sum of those two, the cash account 135 8.73, it’s going to decrease, it’s going to record the interest expense on the income statement of 300 decreasing net income, it’s going to reduce the loan balance by the 1058 73, hopefully taking it down to an amount that matches the amortization table of the 70,009 4127.
11:12
Let’s do it. Let’s save it and close it, and see if that if that is actually what happens. And we’ll go back to the tab to the right holding control scrolling up, let’s do a let’s do a running it, let’s refreshing it up. And then go on into that cash account. Hold CTRL down, scroll down just a bit to see what’s happening round here.
11:36
And we can see down here, we’ve got the 1003 58. So that looks good check goes down back to the report. And then holding control Scrolling back up a bit. So we can see this one the loan account. The loan account is now at 79 or 70,009 4127.
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That should match here 70,009 4127. See how that matches out. That’s why you want one account per loan. So you can tie it out to the amortization schedule, making you feel comfortable and confident that you did the proper data input.
12:12
If I go into that, then of course, holding ctrl scrolling down again, we see our amount here for the check. Going back up going back to our report holding control scrolling up a bit, if we go then to the tab to the right on the income statement and freshen it up. So we have a fresh report we’re looking at, we’re gonna see that we’ve got the interest paid here up top, and the interest paid.
12:36
Now obviously, we could see it for the whole two month time period. If we were to look at this form, just for the month of February, oh 20122 and run that one. That’s all the information we have thus far on that interest expense. So there we go.
12:53
Now let’s do it again, just so we can see the difference if a month pass. So now we’re going to imagine a month past or we’re at the end of February. And we’re going to make the second payment.
13:04
So an entire month has passed. The time flashforward in the movie, time has passed, one month has passed. It’s currently that’s where we’re at. Okay. So then we’re going to do this again, and record the difference.
13:19
So let’s go back to the to the second tab where we’re in. Let’s try to do it with the business view this time. Let’s go back to the Business View. Because I don’t need to add any accounts. I’m going to delete the one I was working on. No, do you want to leave without saving? Yeah.
13:34
And let’s do it with the business view just so we can check out the drop downs. I don’t need to add any new accounts. So it shouldn’t drive me too crazy. That drop down thing that I don’t really like, Chase, we’re going to chase here.
13:49
And then we’re going to imagine it’s the end of the month Oh 228 to two. And so hold on not an expense account. Let’s do a check. I’m going to do a check. Sorry. Hold on, I want to put a check number in. So it’s gonna say it’s a check that we want. Okay, let’s try it again. So now we’re going to say Chase.
14:09
Chase is the bank that we’re paying on Oh, 220-822-1017, we got our check number. That’s what I wanted. And then down here, it’s trying to memorize the transaction.
14:21
That’s great. But it doesn’t work exactly. Because that we can’t just memorize these amounts down here, the total is going to be the same, the payment amount is going to be the same but there’s a different breakout between the interest and principal. That’s the problem.
14:35
That’s what makes it more difficult to automate. That’s what makes it a little bit more difficult to just do with the bank feeds that and the fact that we have three accounts impacted instead of two accounts.
14:45
So we’re gonna have to go over here and say, Okay, I got to make a change. Things here need to change things round here are going to change man to 9559 to 9559 to witness Okay, I forgot to 955925 9.59 and then the loan reduction is going is going to 106 314 106 3.14.
15:16
And so there we have it. So that brings the total to the same I believe, have Hold on a second. Is that the same? Something funny happened to 59106 314?
15:30
Okay, wait, I got this one backwards. The numbers are turned around, can’t you see the numbers are back. Okay, I see it. So now we got the 135 9.73. There. And what’s this going to do? It’s going to decrease the checking account by the 135 9.73. It’s going to record the interest expense now at the 296 59.
15:54
And the loan payable at the 1063 14, bringing the loan payable to what it should be on the amortization table. Hopefully, if I got everything right this time 69878 13. Let’s do it, and see what happens. Do it and see what happens. Okay, I will, here we go.
16:15
We’re gonna then go to the balance sheet and see what happens. I’m seeing now what happened, we’re going to go into the cash account. And scroll down a bit, scroll down a bit. And then if we go down here, there’s the checks so that so notice that the two checks are different.
16:38
That shouldn’t be hold on a second, let’s go back and do it again. It should be the same amount, shouldn’t it on the check. So it’s going to be the 295. I saw this should be two,
16:51
nine, man, I can’t and this should be the one, six 3.14. Okay, let’s try it again. Try it again, should be the same amount. So then there it is, that looks proper. Let’s go back up top again. And then let’s run it again.
17:14
This is why you check it after you do the data input. And then we’re going to go down to the loan payable, the 69 878 13. That should match our amortization table 69878 13 That makes us feel confident, a little more confident. And then I’m going to hold Ctrl scroll down a bit.
17:34
There’s there it is, okay, back up top. Let’s go to the let’s go to the income statement. Otherwise known as the p&l Profit Loss freshen it up. And so now we’ve got these two amounts recorded in the same period at the beginning and end of the month.
17:52
And if I go into there, of course, we see there’s a difference between the amount of interest that was applied out between the two payments, even though the actual cash we paid was the same.
18:03
So that’s going to be our loan payments. And let’s jump on over to our trial balance to check out where we’re at at this point, I’m going to run it to to see what we are doing where we’re at.
18:14
Notice I’m running it for the two months timeframe here on the on the trial balance to check our numbers. And so if your numbers are tying out and you’re working along with us, that’s great. If not, then try doing a range change. Sometimes it’s a range issue. And and then we’ll do a transaction detail report at the end of the section, which is a good tool to diagnose any differences