I do the books for a company, and I just learned that the owner wrote a cheque for $1,000 as loan to one of his vendors. Now the vendor has asked us to apply this loan to the outstanding payables that we owe him.
If I do a credit, it will not show up in the bank account when it comes time to reconcile, how do I enter this?
To record this, there are two ways to do this. One is to just change the account on the cheque to Accounts Payable if you are still in the same fiscal year.
If you are not, then you need to use a Journal Entry to take it out of the Loan account (or the account it originally went into) and move it to the Accounts Payable account.
1. Find the original cheque written to the vendor.
2. Change the Account at the bottom to Accounts Payable.
3. Type in the Vendor name in the Customer Name field.
4. Click on Save & Close.
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1. On the menu bar click on Company, from the drop down list click on Make General Journal Entries.
2. Debit Accounts Payable.
3. Credit the Vendor’s Loan Payable Account.
4. Click Save & Close.
Either method you use, when you go to Pay Bills, you will see a credit for $1,000 which you can apply to the bills.
At the Discount and Credits window select credit amount to apply and click Done.
Once you click Done, QuickBooks applies the credit. Go ahead and pay amount due.