How do I show a payment to an asset loan when the payment is transferred from my son's account

Dawn

Payment is a weekly transfer from my son's checking account to my checking account. I am thinking there is another way to set up payment from his account going through the loan, but I can't figure out how to set this up.

Frankx

Hi @Dawn,

I just want to restate the facts and the question you've asked, in order to make sure I understand your issue(s).

Apparently you've loaned funds to your son and in Quicken, you recorded to payment to him and a corresponding "loan receivable" (which you've called a "loan asset") in your Quicken datafile.  You are receiving weekly payments from your son and you want to know how to record those payments in your Quicken datafile.  Is all of this correct?

You have not indicated how you are recoding the payments you receive from him, and want advice on how to record those - is this also correct?

One additional question is "are you charging interest on the loan that you made?

Get back to me and we'll go from there?

Frankx

volvogirl

Is the loan set up in your Quicken file?  Is it a loan you made TO him?  Or is he paying you for a loan you have in your name?  Either way when you enter the transfer as a deposit in your checking account it should be categorized as a transfer to the loan account or to a category.  How are you recording the Deposit now?

Dawn

I followed another question here and set up an asset loan. It is listed under property and debt, but you do not link to a loan. It creates payments on a schedule, but are going to the asset loan, and not my checking. I also have my son's checking in quicken, so I wanted to set up bi-weekly payments from him to me as a transfer from his checking to my checking. Anyway I think about setting up money owed to me, I can't figure out that extra step of showing payment in the loan or to my account. Maybe I need to start over?

Dawn

I have another loan set up for a trailer I sold to a relative that when the payment comes in as a deposit, I can list the category as the loan, so it's deducting from the amount due on the loan, and deposit is in my account.

Dawn

this is money I lent him to buy a computer.

volvogirl

Did you set it up as a Lender Loan?  Don't know why you can't apply the checking account deposit to it.

Put "Lender Loan" in the Quicken search box in the program.

See if my old notes still work or there might be a newer way....

A lending loan is a loan for which you are the lender and someone is paying you back on an amortized schedule. A lending loan is treated as an asset in Quicken that has a positive balance.

Add an Asset Account , where value of the asset is the amount you are lending. 

In the final window of account setup, when you are asked Is there a Loan on this asset?, select No. 

Open the account you just created, then click the Account Actions icon (the gear icon  on the top of the register), and then choose Convert to a Lending Loan Account. 

In the Convert this Asset to a lending loan dialog, click Convert,

Quicken creates an asset account with a payoff schedule. The account is identical to a "normal" loan account in Quicken. The only difference being the sign of the lending loan and its payments are opposite that of a "normal" loan. 

Dawn

Yes! that is what I did, but I can't figure out how to reduce the loan, when he makes a transfer to my checking. Do I need to set up the payment from his account to the loan, then from the loan to my checking?

Dawn

Real world will be a transfer from his account to mine, in quicken when I download this will reconcile. But no way to then show this in the loan

NotACPA

Is your son's checking account in the same Q data file as your checking account and the loan?

If so, that's the basic problem, as his payment needs to go to BOTH the loan (to reduce it's balance) AND to your checking account (to record the payment received).  And without some finagling, one transaction can't go to 2 places.

Your best option (although not really a great option) is to post his payment to the loan account as 1 transaction and then record a self-referencing transaction into your checking account.  This would be a transaction that uses the name of your checking account itself, enclosed in square brackets e.g. [checking account name], as the category for the deposit.

The BEST option, if you son files his own tax return, is to split off his accounts into their own Q data file.

volvogirl

Whoa.  Let's back up.  Is his checking account in your data file?  It should not be in your file.  You should have a separate data file for him.  I'll have to think about how to handle it if you are making a transfer from his checking to your checking if they are both in the same file.  

Frankx

Hi @Dawn,

You are having the problem because you have comingled your son's bank account (which is his money and is not yours) with your accounts.  As a result you have an "extra one-half of a transaction" that causes the problem.

So you need to post his payment transaction to you- as follows:

Deposit to your bank account -  $100.00
Category for son's payment is "Loan to Son"  - $100.00


The transaction for your son's bank account should be:

Payment to Mom  (decreases cash in son' bank account)             -  $100.00
Category  - "Son's expenses (or something similar) -  $100.00


For this last entry I would just use one of the categories that you use when you enter other transactions that are made from your son's account.  Presumably you are keeping those payments somewhere separate from your expenses.

Frankx

Dawn

He's a teenager to I manage it all, and didn't want to have to go to different files. You got it, that is my dilemma

Frankx

Okay - so just post the other half of the transaction that takes the money out of his checking account to one of the categories you use for the other expenses he pays from his checking account and call it a day.

Frankx

Boatnmaniac

@Dawn -Since you apparently download transactions from the bank to your and your son's checking accounts, I suggest the following:

1)  Categorize the loan payment transaction in your son's checking account as "Loan Payment" or something similar. 

• Do not use a Transfer category to your checking account nor the loan account.
• This "Loan Payment" category might be a custom expense category so you can call it whatever you want...perhaps even make it a sub-category under "Bills".  When you type the category name into the category field of the transaction the first time Quicken will ask you if you want to create a new category.  Click yes and follow the prompts to complete the category set up.  In future transactions, you can use the same category name without needing to go through the category creation process, again.

2)  When the bank downloads the loan payment receipt transaction into your checking account, enter the loan account transfer for the category...[loan account name]. 

• This will keep the cash received in your checking account (where it needs to be).
  
• It will also decrement the amount of the loan that is still due to you.