Account for a loan with journal transactions

Learn how to account for a loan with a video.

Create a loan account

Account for a loan received

Account for a loan repayment

Create a loan account

1. On the left-side menu, click Accounting > Chart of Accounts.
2. At the top right, click Add a new account.
3. In the Account Type field, select Loan and Line of Credit under the Liabilities & Credit Cards section.
4. Name the account, select the currency, and enter a description, if applicable.
5. Click Save.

Account for a loan received

If you upload transactions, the loan deposit may already be imported. Create a journal transaction and delete the imported transaction to avoid a duplicate, or learn how to Account for loans and lines of credit with transactions.

1. On the left-side menu, click Accounting > Transactions.
2. At the top right, click Add transaction > Add journal entry.
3. Enter the date and description.
4. In the first row, debit the account where you received the loan with the loan amount.
5. In the second row, credit the loan liability account with the loan amount.
6. Click Save.

Account for a loan repayment

If you upload transactions, the loan deposit may already be imported. Create a journal transaction and delete the imported transaction to avoid a duplicate, or learn how to Account for loans and lines of credit with transactions.

To record a loan repayment, create a new journal entry for each repayment transaction.

1. On the left-side menu, click Accounting > Transactions.
2. At the top right, click Add transaction > Add journal entry.
3. Enter the repayment date and description.
4. In the first row, for the Account, select the loan liability account you created, then enter the principal portion of the repayment in the Debit column.
5. In the second row, for the Account, select the bank account where the loan is being repaid from, then enter the total repayment amount in the Credit column.
6. To add interest, click Add line.
7. In the third row, for the Account, select Interest Expense, then enter the interest amount under the Debit column.
8. Click Save.

For more help accounting for loans and lines of credit, Wave has a team of in-house bookkeepers and accounting coaches. Learn more about Personalized bookkeeping with Wave Advisors.