Lets assume that you purchase a vehicle for your business. You pay a deposit in cash and borrow the rest from a loan agency.

Details:
Cash Deposit: $3,000
Loan Amount: $19,500
Total Price: $22,500

1. Create a fixed asset account to track the asset in our balance sheet. Name the account something that identifies our asset e.g. Utility Truck (FGT-476).
2. Create a liability account to track our loan. Call it Loan Payable Utility Truck (FGT-476).

Now that we have our accounts set up there are two ways that the purchase of the Asset/Vehicle might have been completed. We will explain how to enter either into Quickbooks Online.

SCENARIO NO. 1 - We pay the deposit out of our bank account and the loan agency pays the remainder direct to the car yard.

We could create either a New cheque or a New Journal Entry to achieve the same result. 

Using New Journal Entry Option.

1. Click New Journal Entry.
2. On the 1st line select the fixed asset account we created earlier. In the debit column enter the total cost of the asset/vehicle - $22,5000. Make an entry in the memo field to describe the line entry.
3. On the 2nd line select the bank account the deposit will be paid from and in the credit column enter the deposit amount - $3000. Make an entry in the memo field to describe the line entry.
4. On the 3rd line choose the liability account we created earlier and in the credit column enter the amount of the loan. - $19500. Make an entry in the memo field to describe the line entry.
   
   

 Using New Cheque Option.

1. Click on "New Cheque".
2. On the 1st line choose the "fixed asset account" we created earlier and enter the total amount of the asset/vehicle. Enter a description in the description field.
3. On the 2nd line choose the liability account we created earlier and enter the total borrowed amount as a negative number. Enter a description in the description field.
4. Check the total of the cheque is equasl to the deposit amount. (3,000).

SCENARIO NO. 2 - The loan agency pays the money into your bank account and then you pay for the total cost of the vehicle including the deposit from this account.

1. For this choose the "New Bank Deposit" option.
2. In the Bank Deposit window choose the bank account that the loan agency paid the money into.
3. In the "Add funds to this deposit window" choose the liability account we created earlier for the loan. Enter something in the description column as well as the amount that the agency deposited into your account.

TO RECORD THE LOAN PAYMENT INTO QUICKBOOKS ONLINE:

When we record a payment to the finance company off the loan we also want to make sure that there is a record of the interest paid etc. To do this we need to create an "New Expense" and a "New Journal Entry."

Click on "New Expense".

Choose the loan liability account created earlier.

Enter the total amount of the payment to the finance company.

Click on "New Journal Entry"

On the 1st line choose "Interest Expense" as the account and enter the interest for that month in the "debit" column. If there is no account call "Interest Expense" in the chart create one.

On the 2nd Line choose the "Loan Liability Account" we created earlier and enter the interest amount in the "credit" column.

See Also: How to record and track a vendor bill paid by finance in Quickbooks Online