Journal entry help

When you write the check, you should split it between the loan liability account (for the principle) and an interest expense account (for the interest). If you want to do a journal entry to correct it, you should debit the interest expense account for the interest portion, and credit the loan account.

why don't you set up this loan in Loan Manager?? then, the payments will hit the correct accounts..

If I set this up using the loan manager will it decrease the liability so it shows on the balance sheet?

That is exactly what the loan manager will do if set up correctly.

Thank you so much for your help. I will work on getting that set up.

one more piece of advice....try & avoid using journal entries if at all possible. You should be able to do just about everything in QB using TRANSACTIONS...i.e., writing checks, paying bills, etc. the only time you should be making JE's is at YE, or Quarterly, whatever - for dep'n, things like that....

Thanks for the advice. I am forced to use journal entries because of the way we have to keep the books for the Chamber of Commerce. We have different cash accounts that money has to come out of an reimbursements so this is the only way I can do it. We have to do it this way because we can't afford to buy a program that is made specifically for us. I have to make journal entries at the end of every month to reclassify the cash.

Please expand on how you reclassify cash

We have one general cash fund and under this we have cash accounts for each of our classes. I pay a bill for class "A" and when I write the check I pick this cash account for it to come out of. When at the end of the month I pull a balance sheet by class "A" of course it is out of balance. I then pull a combined balance sheet which has all the classes and make a journal entry to reclass class "A's" cash so it matches the combined balance sheet class cash. The combined balance sheet has the correct cash balance by each sub account under the general fund.
When I do this I can have a balance sheet by each class. I was told to do this by the accountant and evidently it works because she was just here for an audit and everything was fine.