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Setting up to account for loan and interest rate

TrevorTrevor Member Posts: 2

Hello,

I just started using Wave to track all of my business accounting. Our company received a $35,000 loan to start our business, to be paid back monthly at an 8% interest rate. We are receiving the loan in draws. Our first draw was $5,000 which we deposited into a business account that we have already connected to Wave. How do we set up this loan in the Wave platform to make our profit and loss statements and balance sheets reflect the loan?

Any help is much appreciated.

Thank You

in Accounting Technical Support

Comments

  • CharlotteCharlotte Member Posts: 671 admin

    Hey Trevor, thanks for posting! The easiest way to record a loan of this nature is by creating a journal transaction. You'll first need to create a liability account for the loan if you haven't already. Create your JE. Debit the bank account for the amount you withdrew, and credit the loan liability.

  • TrevorTrevor Member Posts: 2

    Thank you for the response Charlotte. I am still a little unclear on how this should work. I created a new loan account and attempted the journal transaction. Could you clear this up bit. Thank you for your help. Trevor

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