As everybody is well-apprised of QuickBooks, such a robust accounting & financial application that executes multiple bookkeeping errands quite efficiently in no time. Like every other financial activity, users can also record Paycheck Protection Program loans in QuickBooks that were generally initiated to help small-to-mid-sized businesses or to keep your financial health & reports consistent with previous years . Now, here a query arises on How To Record PPP Loan In QuickBooks? In our today’s article, we are going to discuss about this in detail, take a look or visit QuickBooks Payroll Support:
Efficient Steps To Record PPP Loan In QuickBooks
- Generate A Sub-Account To The bank Account In The Chart of Accounts:
- While being in the Chart of Accounts tab, just select Account ▼, and then choose New option.
- Now, choose Bank, then hit the Continue button.
- After doing that, punch a name for the account, like “PPP Loan Funds”
- Then, just tap on Sub-account and then select the bank account from the drop down.
- Finally, click Save and then Close.
2) Originate A New Loan Account In The Chart of Accounts.
- Once being on the Chart of Accounts window, simply select Account ▼, and then choose New option.
- Now, you must choose Other Account Types, and then select Long Term Liability option from there.
- Then, hit the Continue button.
- After that, punch a name for the account, like “PPP Loan”
- Lastly, just click on the save and close button.
3) Keep A Record Of The Loan Proceeds Received
- Firstly, select the banking option, and then select the Make Deposit option.
- Then, just alter the Deposit To account to the new bank sub-account.
- Now while being in the From Account column, select the loan account created.
- Then, just punch the amount received in the Amount column
- Ultimately, just click Save and then close .
4) You can pay your expenses from the bank account as you normally do.
5) Generate A Journal Entry.
After remunerating an eligible expense utilising PPP loan funds, just punch a journal entry to transfer the total amount from the PPP Loan Funds sub-account to the constant bank account. Then, just note in the memo why the transfer is being executed. The transfer amount that is used for payroll will be for the authorized expenditures only. These amounts can be acquired from a Payroll Summary report. Also, the PPP Loan Funds sub-account will display how much of the funds are left. For doing that, follow the below-mentioned process:
- Firstly, navigate to Company, then Make Journal Entries
- Now, punch the info as displayed
- Finally, just click on the Save and Close button.
6) Produce A New Account To Keep A Record The Use Of the PPP Loan Funds.
- As soon as being in the Chart of Accounts, just choose Account ▼, then select New option.
- Later, simply choose Other Account Types, then select Other Income
- Then, click on the continue option.
- Now, enter a name for the account, such as “PPP Loan Forgiveness”
- After that, just click save and close.
- If you really desire like the expenses detailed, just repeat those five steps to generate sub-accounts under PPP Loan Forgiveness (i.e. Payroll Costs, Rent, Utilities, Mortgage Interest)
7) Again, Create A Journal Entry.
Try to generate a journal entry to debit the PPP Loan account for the total amount forgiven, and credit the new PPP Loan Forgiveness account or sub-account for the amount of expenditures to total the forgiven amount. For doing that, follow these steps:
- Firstly, navigate to the company, then Make Journal Entries.
- Then, just enter info as displayed.
- Finally, click on the Save and then Close button.
Hopefully by reading our blog, you might have got ideas on How To Record PPP Loan In QuickBooks? For requiring further assistance, you can directly call our experts by ringing on +1-855-533-6333. Our experts are always available for your assistance 24/7, constant!!
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