Journal Entry for a Loan

How to record a loan for a vehicle, mortgage, or some other item financed for your center.

Before You Begin

Making a Journal Entry to show a loan that has been taken out can be complex. There may be many issues involved. Ask your accountant how the entry should be made and what accounts should be used. The following information is only an example.

1. You may need to add new numbers to your Chart of Accounts, such as:
   1. A new asset (such as 1700.00 Minivan).
   2. A new liability (such as 2700.00 Minivan Loan).
   3. New expenses (such as 5700.00 Minivan maintenance, and 5702.00 Minivan interest expense).
2. You may want to create a new General Journal Type (such as Loans) to record the journal entry.

Getting There

Click the General Journal icon on the toolbar. It doesn’t matter which vendor is displayed since journal entries are not linked to a vendor.

Note: Refer to Make Journal Entry – General Journals if you are not familiar with the Journal process.

The entry may show an increase to your vehicle asset account with a corresponding increase to your loan liability. In this case, the value of the minivan and the amount of the loan are both 18,000.

What’s Next

See: Make a Payment on the Loan