##### QuickBooks 2017 For Dummies
To record loan payments in QuickBooks 2017, you need to split each payment between two accounts: the interest expense account and the loan payable account.

Suppose that you make \$75 monthly payments on a \$5,000 loan. Also suppose that the lender charges 1 percent interest each month. The following journal entry records the first month’s loan payment:

 Debit Credit Explanation Interest expense \$50 Calculated as 1% of \$5,000 Loan payable \$25 The amount left over and applied to principal Cash \$75 The total payment amount
The next month, of course, the loan balance is slightly less (because you made a \$25 dent in the loan principal, as shown in the preceding loan payment journal entry). The following journal entry records the second month’s loan payment:
 Debit Credit Explanation Interest expense \$49.75 Calculated as 1% of \$4,975, the new loan balance Loan payable \$25.25 The amount left over and applied to principal Cash \$75.00 The total payment amount
Get the lender to provide you an amortization schedule that shows the breakdown of each payment into interest expense and loan principal reduction. If this doesn’t work, choose Banking → Loan Manager. QuickBooks displays the Loan Manager window. If you click the Add a Loan button, QuickBooks collects a bit of information about the loan terms and builds an amortization schedule for you. Note, too, that you can tell QuickBooks to remind you of upcoming loan payments and even to schedule the payments.

You can record loan payments by using either the Write Checks window or the Enter Bills window. Just use the Expenses tab to specify the interest expense account and the loan liability account.

You can check your loan accounting whenever you get a loan statement from the bank. What the bank shows as the ending balance for a particular month should match what QuickBooks says is the balance for that month.

To correct discrepancies between the loan balance that the bank shows and the loan balance that QuickBooks shows, make a general journal entry that adjusts both the interest expense and the loan principal at the same time. If the loan balance is too low (say, by \$8.76), you need to increase the loan balance and decrease the loan interest expense by using the following journal entry:
 Debit Credit Explanation Interest expense \$8.76 Adjusts the interest expense by the same amount as loan balance changes Loan payable \$8.76 Increases the loan principal balance to match the lender’s statement