How to setup a Line of Credit in QuickBooks

Learn How to setup a Line of Credit in QuickBooks

Are you trying to set up a line of credit?

Step 1. Create the current liability accounts.

Step 2. Enter the transactions (did you borrow, pay down the line of credit).

Don’t forget to break down the principal and interest. Let me show you …

This video covers setting it up and the different ways you may be paying down the line or borrowing against it.

The key is to enter into QuickBooks exactly what happened.


➡️ Setting Up Line of Credit

Go up to “List”
“Chart of Accounts”
Go down to “Account”
“New”
If you don’t see “Loan,” click “Other Account types: Other current Liability”
Click “Continue”
“Account Name”
“Tax-Line Mapping” – Tax professional
“Enter Opening Balance” (Not Recommended)
Click “Save & Close”


➡️ Transfer/Deposit Line of Credit to Your Account

Go to “Banking”
“Transfer Funds”
“Transfer Funds from”
“Transfer Funds To”
Click “Save & Close”


Or

Go to “Banking”
“Make Deposits”
Pop up screen will show. Click “Cancel”
“Deposit To”
“Date”
“From Account”
“Memo”
“Amount”
Click “Save & Close”


➡️ Paying Line of Credit Back

Go up to “Banking”
“Check Register” / “Write Checks”
“Add details”
Click “Save & Close”


➡️ Decided to buy a vehicle?

**Inside Line of Credit

“Date” you purchased the vehicle
“Account”
“Amount”
Find “Asset” Account
“Memo”


Timestamps:

0:00 - Intro
0:09 - Setup Line of Credit in QuickBooks Desktop
0:47 - Current Liability vs. Long term liability
2:25 - Entering transactions (Line of credit)
3:46 - Paying Line of credit
4:58 - Purchased vehicle with a line of credit
6:29 - Final Thoughts



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