Loan repayment. Any repayment under expenses not via journal entry right?

Hi there, Walizarip.

That's a great question about how loan repayments are recorded in QuickBooks Online (QBO) and their impact on the Balance Sheet.

To answer your first question, yes, you are correct that it is best to use an Expense or Cheque transaction to record the payment. It's also advisable to split the payment between the appropriate accounts. Consulting an accountant to set up separate accounts for principal and interest can help ensure your records are accurate.

For your second question, only the principal portion of the loan repayment reduces the liability on the Balance Sheet. The interest portion is classified as a true expense on the profit and loss statement.

To learn more about how to record a loan payment in QBO, please check out the article located in Step 3: Set up a loan in QuickBooks Online.

Feel free to revisit our Community forum for all your QuickBooks needs. I'm always here to help.