How do I record the receipt of a loan and repayments?
This article describes the basic recording of the receipt of a loan where the loan amount is received by you (i.e. money is not paid directly to creditor) and to record the loan repayments. Because there's lots of loan types, interest rates, terms and conditions, you might need help from your accounting advisor to determine the best way to set this up for your loan.
To accurately track your loan balance, you'll need to know:
Step 1: Setup Loan Accounts
Step 2: Add Receipt of Intial Loan Amount
Step 3: Record a Loan Repayment.
Note: An amortization (or loan) schedule is a complete table or list of periodic loan payments, showing the amount of principal and the amount of interest that comprise each payment until the load is paid off at the end of its term. Each periodic payment is the same amount in the total for each period. However, early in the schedule, the majority of each payment is what is owed in interest, later in the schedule, the majority of each payment covers the loan's principal. - Ask lender for a Loan Repayment Schedule.
A. Setup Supplier with loan details.
B. Add repayment transaction to Cashbook.