Long Term Liability needs to add interest to balance

Feb 03, 2009 2 Replies

Hello -



I created a long term liability. I basically borrowed $40k from my Mutual fund. I created an account for the loan. As I have paid it back, I write a check in QB for the total amount, and in the detail, one line is the amount of principal I am paying back, and in the other I get the interest from my mutual fund statement each month, in the section relating to my margin loan.



One month, I sent a check for less than that interest. So the interest that I didn't pay added to the amount/remaining balance of the loan. How can I have that reflected accurately in my loan balance? I have never done a journal entry - that intimdates me...



Thanks in advance,



chris


The simplest method is to post a journal entry. Just do it.

Debit Interest Credit Loan Payable.

You can also go back to the payment in your post and add two more detail lines, one for interest the other for loan (as a negative number) .

Journal entries are a piece of cake. Just increase (credit) the note balance & charge interest expense.

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