Quicken for Windows
Setting up new account under Assets- Loans, where I am the lender
When I set up a new account under assets-Loans, where I am the lender, why does the amount show as an expense under reports- income & expense? I am paid interest only, then when it is paid in full, why does the principal amount show as income?
"When I set up a new account under assets-Loans, where I am the lender, why does the amount show as an expense under reports- income & expense?"
This is unclear. Are you saying the full amount of the loan shows up, at setup, as some sort of expense? Or maybe you're referring to interest received showing up as an expense?
"I am paid interest only, then when it is paid in full, why does the principal amount show as income?
Well, it shouldn't. The accounting for the payoff is:
Debit (increase) Cash in Bank $XXX
Credit (decrease) Loan Receivable $XXX
You can see there's no "income" affect there so ordinarily it wouldn't show up on and income and expense report. Maybe you're referring to the transfer (that's the accounting shown above) showing up as a form of "income" like "From [Loan Receivable) $XXX" on an income and expense report.
I think you need to add some more detail here, like exactly how you're setting up the loan receivable and exactly how the "expense" and "income' are reported on the income and expense reports.
Both the setup of the principal of the loan and the pay down of the principal are "transfers" and my guess is that you're seeing the these transfers on your income and expense report because of how you've customized that report.
Thanks for replying, Tom...Yes, the full amount of the loan shows up, at setup, as some sort of expense.....and the same with the principal payoff shows up as income. I set it up the way it showed me in the tutorial. I will go back and set it up some different ways and see if it makes a difference. I never had a problem until an update a few years back. I have called Quicken & they can't seem to help me. So I have to adjust the amounts on both income & expense manually to get a true P & L. (profit & loss) Thank-you
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