You can track your line of credit and loan payments in CosmoLex. Your loan principal should display on your Balance Sheet as a Liability while your paid Interest displays on your Profit & Loss (Income Statement) report as an Expense.
Record a Loan or Line of Credit
To record a loan or line of credit:
- Under your Chart of Accounts, create a liability account. CosmoLex includes a 2500: Line of Credit (Current Liability) account for this purpose, if you want to use it. For information regarding creating a chart of account, see How to Customize Your Chart of Accounts.
- Add a deposit transaction to record the loan amount in the appropriate bank account. In the Account field, select your newly created [loan] account or the 2500: Line of Credit (Current Liability) account. This transaction automatically creates a journal entry in your new account with the opening balance.
Record Payments to Your Loan or Line of Credit
Using the Accounts Payable tool allows you to record the recurring payment in CosmoLex, making it convenient while avoiding manual entry errors.
- Add an Accounts Payable bill. When doing so:
- Record the entire amount you agreed to pay (principal + interest).
- Under Options, check the Recurring box and select the appropriate time interval.
- For the Account field, click the split icon to post the bill to multiple accounts. In the Split Transaction account, select these:
- Your newly created [loan] liability account = Debit principal amount
- 6325: Interest Expense (Expense) account = Debit interest amount
- In the lower right corner, click Save.
The system saves your recurring payment and automatically displays a bill at your chosen time interval.
When you pay your bill, the system automatically posts the amounts to the correct account.