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Barney
Joined: 19 Aug 2005
Posts: 125
Location: California
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| Posted: Thu May 08, 2008 1:18 pm Post subject: Line of Credit |
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How should you show a deposit from a line of credit that is from another source, i.e., (owners personal) and not a line of credit opened by the company.
How should you show a payment made to that same line of credit from the company.
I've looked at QuickBooks help and there is nothing on lines of credit. |
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sgbdad23
Joined: 26 Feb 2008
Posts: 10
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| Posted: Fri May 09, 2008 10:33 am Post subject: |
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I would create an account called loan from shareholder LOC.
Dr Cash in bank
Cr loan from shareholder LOC
Make sure that there is documentation in the corporate minutes that talks about this money being furnished a a loan with a definite term, and interest rate. Create the loan manager in Quickbooks, the interest will be placed in the company as interest expense, and the principle will reduce the amunt on the loan and increase owners equity.
The interest deducted on the business will be counted as income on the shareholders personal tax return. |
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Barney
Joined: 19 Aug 2005
Posts: 125
Location: California
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| Posted: Fri May 09, 2008 11:13 am Post subject: |
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Thank you Sgbdad23.
I was thinking that maybe it should be as entered as a credit card.
I will set it up as Loan from shareholder LOC.
Your help is appreciated. |
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