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How to Record Borrowed Money in QuickBooks 2012

By Stephen L. Nelson

Liabilities, such as borrowed money, aren’t that tricky to record in QuickBooks 2012 after you’ve seen how the journal entries look. The following table, for example, shows how you record money borrowed on a loan. In the case of a $10,000 loan, for example, you would debit cash for $10,000 and credit a loan payable liability account for $10,000.

Journal Entry 13: Borrowing Money via a Loan
Account Debit Credit
Cash 10,000
Loan payable 10,000

Sometimes, you may purchase an asset with a loan. Suppose, for example, that you purchased $10,000 of furniture by using a note payable or a loan. Even though there is no immediate cash effect, you still record the transaction. The following table shows how you record this transaction. A furniture account gets debited for $10,000, and a loan payable account gets credited for $10,000.

Journal Entry 14: Buying an Asset with a Loan
Account Debit Credit
Furniture 10,000
Loan payable 10,000

You can record Journal Entry 13 directly into your checkbook when you record the $10,000 cash deposit. You can also record Journal Entry 13, as well as Journal Entry 14, by using the Make Journal Entries command that QuickBooks provides. Journal Entry 14, by the way, can be recorded only by using the Make Journal Entries command.