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Long-term Liability

Posted by Wendy 
Long-term Liability
October 28, 2014 10:59PM
I started Quickbooks in 2005.. my mortgage payment & purchase payment (bank and personal, respectively) were just entered in checks written. I never set up the credit side, nor did I adjust for the interest. Is there an easy way for me to correct this? Thanks for your help!
Re: Long-term Liability
October 29, 2014 11:00PM
Hello Wendy,

It really depends on when the loan was originally taken out. If you don't need previous years adjustments you can just set up a new account in the Chart of Accounts. Go to the Chart of Accounts, choose the Account Tab at the bottom, new account, choose Loan and the type will automatically be Long Term Liability. Then click the "Enter opening balance" tab and enter the balance on your loan as of 1/1/14, or the current year.

Go to the register of that account and enter the Interest paid year to date in the decrease column and use Mortgage interest for the account. Note in the Memo field that it is interest for the year to date. Then when you make a payment code the principal to the new Loan account and the interest to the Mortgage interest account. You can wait until the end of the year and do one entry to the Loan register instead if you don't want to split the payment monthly. Just make sure it is 12/31/14, not 1/1/15 or your reports will not be correct

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