If I have a bank loan where can I add that
Is the bank loan a variable loan like an overdraft with regular transactions of a fixed loan being repaid via instalments.
For variable loan - create under Cash Accounts tab.
For fixed loan - create under Settings - Chart of Accounts a Balance Sheet Liability account
thank you
If i get a loan from a bank , $5000 with the interest of 10%
my liability was higher than the amount received.
How do i update the accounts
For the Loan - Receive Money to liability account for 5000.
Then as each month’s Interest is charged - Spend Money to P&L - Interest Expense account
This is not true, even though you will eventually pay more than the principal amount. Interest is owed only as time goes on. So your liability when the loan is first taken is only the principal. Additional amounts owed in interest are immediately paid as they come due, so they are treated as current expenses rather than liabilities to be paid in the future.