How to transfer a loan to another loan?
CultureGap
Member Posts: 15
A family member helped me pay off a business loan. Now the business needs to pay her off.
Because she paid off our business loan with a check made out directly to that lender, this payoff transaction will not show up as a bank transaction on our business account.
So, I don't think it would be good business practice to keep using the existing liability account for the original loan in Wave, and then categorizing loan payments to her to this account.
Should I create a new liability account for this new loan? And how do I close out the original liability account, and put a starting balance in the new liability account?
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Comments
@CultureGap,
If the same amount is owed to her then I would just edit the name of the loan. I don't see a need to set up a new liability. If you feel inclined to go that way, then set up a new liability and do a journal entry to transfer the balance. Debit old liability $XXX.XX Credit new liability $XXX.XX
Hi Mike,
Ok perfect..so I can go either way. Thanks so much for your quick advice!
Yep