Confused by loans

Bernie Cosell wrote in news: snipped-for-privacy@library.airnews.net:

When I loaned money to a relative I created a Cash account. As I loaned him money I recorded the check in my checking account register with him as the payee and the loan account as the Category/Transfer account. The money shows up as a "Receive" in the loan account, so teh account balance reflects how much he owes.

As he made payments, I deposited his checks in my checking account and recorded them in the checking account register with the category split as "Loan Payment" and "Interest Income"

Porter Smith wrote in news:XnsA1E88D311475Dmyport2000yahoocom@216.151.153.168:

Hmm, The bottom of my post got cut off.

I also record his payment in the loan account as a "Spend".

I setup the loan account as a "Separate" account so the balance doesn't appear as part of my net worth, although I suppose legally it is considered an asset.

} Bernie Cosell wrote in } news: snipped-for-privacy@library.airnews.net: } > } > I can see setting up a separate account for a loan. Would that mean } > it'll be sort-of double-entered: when I get a payment, it'll be *both* } > a payment on the loan *AND* a deposit to some other accounts? I guess } > I'd put the 'category' for the deposit as "payment for loan to } > John"??? } } When I loaned money to a relative I created a Cash account. As I loaned him } money I recorded the check in my checking account register with him as the } payee and the loan account as the Category/Transfer account. The money } shows up as a "Receive" in the loan account, so teh account balance } reflects how much he owes.

That makes sense. so I'd make the category for the payments be [LOANACCOUNT] and Quicken'll magically take care of it.

I've just run into a problem, though: I'm all the way setting up the loan, on the very last screen, and it says "Transaction" -- type = deposit [correct!], but then there's a "payment method" selector that doesn't seem to make sense and also "payee" [that'd be me, right? Why does it ask me?]

The problem with payment method is that everything there seems to be about

*payments*, not _receipts} [e.g., it says "account to pay from" and "days in advance"] . Since it said 'deposit', I'm pretty sure I correctly told it it was a loan I *made*, not received, but I'll double check.

/Bernie\

It sounds like you set up the account using the Quicken setup for a loan. That type of account only applies to money you borrow. The Quicken Help for a loan you own says to set it up as an asset account:

1. Add an asset account, where value of the asset is the amount you are lending.
2. In the final window of account setup, when you are asked Is there a Loan on this asset?, select No.
3. Open the account you just created, click Account Actions icon (the Account Actions icon), and then choose Convert to a Lending Loan Account.
4. In the Convert This Asset to a Lending Loan dialog, click Convert.
5. Quicken creates an asset account with a payoff schedule. The account is identical to a "normal" loan account in Quicken. The only difference being the sign of the lending loan and its payments are opposite that of a "normal" loan.