Loan Accounts

Use Loan Accounts for all debts that are not credit cards.

HINT-- Loan accounts help the Goldenseal accounting software to keep track of loan balances, loan payments and liabilities on your balance sheet.

LOAN ACCOUNT DATA
        When to Use Loan Accounts | Creating Loan Accounts | Data Fields | Calculated Fields
        Current Balance | Minimum Balance | Starting Balance | Status Field | Starting Balance

USING LOAN ACCOUNTS
        Depositing Funds | Paying Bills | Loan Transactions | Using Loan Accounts

LOAN ACCOUNT RECORDS
       Entering Records | Changing Records | Deleting Records | Voiding Records
       Finding Records | Sorting Records | Fixing Mistakes

Website Info Links
       Accounting Software | Bookkeeping Software | Job Costing Software

RELATED TOPICS
       Bank Checks | Bank Deposits | Bank Payments | Bank Transactions | Bank Transfers
       Cash Accounts | Checking Accounts | Credit Card Accounts | Investment Accounts

When to Use Loan Accounts

Use Loan accounts for mortgages, equipment loans, notes, and any other loans that are paid with a lump sum, or through regular periodic payments.

HINT-- For lines of credit and any other revolving loans that have irregular payment amounts, use a Credit Card account.

Loan accounts can include:

  • Construction loans that use a draw schedule for payments
  • Mortgages or equipment loans with a fixed repayment schedule.
  • Property "home equity" loans
  • Simple notes or other loans that involve a fixed starting amount, or a fixed set of payments

Creating Loan Accounts

To create a new Loan account, follow these steps:

  1. Choose Loans from the Accounts menu.
  2. Choose New Record from the Edit menu, or click the New button.
  3. Fill out information about the account.

QUICK SETUP HINT-- You only need to enter an Account Name.  If you write checks, enter checkbooks and the next check number.  For accurate reconciling, enter a Starting Balance.

Data Fields

Enter the following information for each Loan account:

Name-- Enter a short name for the account. This is the text that will appear in the Chart of Accounts and in pop-up menus.
Bank Name-- Enter the bank, organization or individual that gave the loan.
Address-- Enter the address where payments are sent.
Account Number-- If there is an account number for the loan, enter it here.
Phone-- Enter the phone number for the loan agency.
Starting Balance-- Enter the starting balance for the account-- the amount owed on the loan when you first started using Goldenseal.
Minimum Balance-- Enter the lowest balance you can have in this account.  Usually it will be a negative number.
Start Date-- Enter the date the loan is signed.
Interest Rate-- Enter the interest rate that you pay on the loan.
Loan Duration-- Enter the number of payments that you'll make on this loan.
Usual Payment-- Enter the usual payment amount for this loan.
Deductible-- Turn on the checkbox if interest payments on this loan are tax-deductible.

Entered-- When you create an account, today's date will be entered automatically.
Record Number-- An internal record number will automatically be assigned.
Division-- Use the clairvoyant field to enter the company division to which this account belongs.
Payment Terms-- Use the clairvoyant field to enter the payment terms used for this loan. The payment terms will set the interest rate, due dates and other payment information.
Collateral Type-- Choose the type of asset that is used to secure this loan.
Collateral-- Choose the equipment, inventory, investment or real estate asset that is used to secure this loan. Loan interest costs will automatically be transferred as a cost to that item.
Checkbooks-- If you can write checks that draw on this loan account, enter one or more checkbooks, with the next check number for each.

Comments-- Enter any comments you'd like to make about this account. You may want to enter key words to make it easier to locate or group particular accounts.

Calculated Fields

Goldenseal shows the following calculated value for this account:

Current Balance-- The current balance is the most recent running total, after all bank transactions are included.

Status Field

Enter the current status of this account:
Active-- You currently use this loan.
Inactive-- You don't currently use this loan, but you may in the future.
Closed-- You definitely don't use this loan any more.

Starting Balance

When you first start using Goldenseal, enter the amount that you owe on a Loan into the Starting Balance field.

A Loan account usually starts out with a negative starting balance (or zero).  When you draw money out of the loan account or when interest accrues, the balance will get more negative.  When you make a loan payment, the balance will get less negative.

If a loan is a "line of credit" with a maximum balance, enter the TOTAL amount of the credit line into the Minimum Balance field. In the Starting Balance field, only enter the amount that you actually owe when you start using Goldenseal.

Loan Transactions

To move money into or out of a Loan account, use a Loan Transaction.

To create a Loan Transaction, follow these steps:

  1. Choose Loan Transactions from the Bank menu, and choose an account from the submenu.
  2. Click the New Button, or choose New Record from the Edit menu.
  3. Click on the Type popup at top center, and select a Payment, Deposit, Transfer In or Transfer Out.
  4. Enter other details for the bank transaction.

Using Loan Accounts

To move money into or out of a loan account, choose Loan Transactions from the Accounts menu, and choose an account (or All Accounts).

When interest accrues on the loan, follow these steps:

  1. Choose Loan Transactions from the Accounts menu, and choose the account from the submenu.
  2. Click the New button, or choose New Record from the Edit menu.
  3. Enter Transfer Out into the Type popup at the top of the record.
  4. Enter Interest Paid into the Transfer To popup.
  5. Enter the interest due into the Amount field.
  6. Enter job cost information for the interest expense.  You'll probably assign it to an Overhead account.
HINT-- If interest is the same every month, you can enter it as a Recurring Transaction.  If it is different every month, you can enter the interest charge as a Template.

When you draw money out of the loan account, follow these steps:

  1. Choose Loan Transactions from the Accounts menu, and choose the account from the submenu.
  2. Click the New button, or choose New Record from the Edit menu.
  3. Enter Payment into the Type popup at the top of the record.
  4. Enter the account class receiving the funds into the Payee Type popup.
  5. Enter the receiving account into the Pay To field.
  6. Enter the payment amount into the Amount field.
When you make a loan payment by check, follow these steps:
  1. Choose Checking Transactions from the Accounts menu, and choose the account from the submenu.
  2. Click the New button, or choose New Record from the Edit menu.
  3. Enter Bank Check into the Type popup at the top of the record.
  4. Enter Loan account into the Payee Type popup.
  5. Enter the loan account into the Pay To field.
  6. Enter the payment amount into the Amount field.
HINT-- You don't need to itemize principal and interest on the check itself.  Just enter the interest as a Transfer Out in the loan, and Goldenseal will automatically figure the correct principal reduction for the loan payment.

If you pay the loan by an automatic transfer from your checking account, follow these steps:

  1. Choose Checking Transactions from the Accounts menu, and choose the account from the submenu.
  2. Click the New button, or choose New Record from the Edit menu.
  3. Enter Transfer Out into the Type popup at the top of the record.
  4. Enter Loan account into the Payee Type popup.
  5. Enter the loan account into the Pay To field.
  6. Enter the payment amount into the Amount field.
To reconcile the account against your bank statement, choose Reconcile from the Accounts menu.

To find a specific loan transaction, use the Find command.

To view all of your loan transactions in one place, choose Banking from the Reports menu, and choose Loan Transactions from the submenu.