ANSWER ID:11136 Image Removed
This support note explains how You can use AccountRight to record the receipt of money derived from a loan and also how to record the loan repayments. Here's what's involved: 1. Create a liability account for the loan. 2. Record a Receive Money transaction for the loan amount. 3. Record Spend Money transactions for the loan repayments. Task 1 - Because there's lots of loan types, interest rates, terms and conditions, you might need help from your accounting advisor (or the MYOB Community) to determine the best way to set this up for your loan. To accurately track your loan balance, you'll need to know: - the initial loan amount
- the value of your repayments, and
- the repayment breakdown (how much of the repayment reduces the principal, and how much relates to interest charges).
Let's step you through setting up a basic loan: | UI Expand |
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| title | 1. Create a liability account for the loan |
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This task involves setting up a You need a liability account |
which will , in other words when money is received you'll allocate it |
can be allocated to this account. - Go to the Accounts command centre and click Accounts List.
- Click the Liability tab then click New.
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The Edit Accounts window is displayed.Choose Other Liability in the Account Type field as highlighted below (not applicable for BusinessBasics).Give the account a number which suits your accounts list and enter an Account Name of your choice.  Image RemovedClick OK.This task involves recording a Receive Money transaction to deposit the loan into the liability account created in the previous task.- For the Account Type, choose Other Liability.
- Specify an Account Number that suits your account list.
- Enter a suitable Account Name. Here's our example:
 Image Added - Click OK.
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| title | 2. Record the receipt of the loan |
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| When you receive the loan, use a Receive Money transaction to enter it into AccountRight. Here's how: - Go to the Banking command centre and click Receive Money.
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In BusinessBasics go to the Command Centres menu and choose Banking then choose Receive Money. The Receive Money window is displayed.- In the Deposit to field, select the bank account
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where the loaned funds will be held (see image below).Enter the Date and the Amount Received (the loan value)- that the loan money was deposited into.
- In the Amount Received field, enter the loan amount.
- In the Acct
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#- No. column, select the liability account created in the previous task.
- In
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[Australia only] column [New Zealand only]the - /GST column, specify the N-T (No Tax/Not Reportable) tax/GST code
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(see image below). [Australia only] Image Removed [New Zealand only] Image Removed - . Here's our example:
 Image Added - Click Record.
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Task 3 - Record Spend Money transactions for | UI Expand |
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| title | 3. Record the loan repayments |
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This task represents the Loan repayments can be recorded using Spend Money transactions |
which will need to be recorded each time a loan repayment is made. Our example below is for a fixed repayment with the interest portion allocated to an expense account. This allows the loan interest to be tracked separately. For your loan, you might need to seek clarification from your accounting advisor about the best way to enter the repayments. - Go to the Banking command centre and click Spend Money.
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In BusinessBasics go to the Command Centres menu and choose Banking then choose Spend Money. The Spend Money window is displayed.- In the Pay from Account field, select the account you
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want to make the payment - 're making the repayment from.
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Enter the Date and the Amount of the payment- In the Amount field, enter the total value of the repayment.
- In the Acct
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#- No. column, select the liability account created
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in Task 1[Australia only] column [New Zealand only]the - /GST column, specify the N-T (No Tax/Not Reportable) tax/GST code.
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[Australia only] Image Removed [New Zealand only] Image Removed Click Record. - Specify bank interest/charges on a separate line and use the applicable tax/GST code for your needs. Here's our example:
 Image Added - Click Record.
As you record loan repayments, |
you will see the balance of the liability account |
reduce reflecting will be reduced to reflect a reduction in that liability. |
Tip: | UI Text Box |
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| If your loan repayments are |
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on a schedule spend money Spend Money transaction as a recurring transaction. |
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Referring to the example Spend Money transaction above:- The fixed amount of the repayments in this example is $550.00, comprised of $500 allocated to the bank loan liability account (to repay the loan) and $50.00 allocated to the Bank Charges expense account (for interest accrued on the loan).
- It is possible to reflect the Bank Interest and Charges in the liability account by means of the initial receive money transactions.
[Australia only]Our support notes Hire purchase setup - GST cash basis and Hire purchase setup - GST accrual basis contain information on this.
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