of course you see more money owing to company X, you received that money and you used it to pay company Y

as far as I understand it

Exactly... how can I pay off loan without changing the amount for company's X loan. 

Margaret Kasza said:

how can I pay off loan without changing the amount for company's X loan

Basically you can't pay off any loan without changing the amount owing.

For your example, you have borrowed from Peter (X) to pay Paul (Y).  When you recorded the transaction, you increased what you owe to Peter and decreased to zero dollars owing for Paul's loan.

You have now paid off Paul and show on the balance sheet that you don't owe him any money.

You now will pay off Peter based on the new loan's requirements for payment.  This may be monthly payments of $xxx for 5 years, etc.  Each payment will reduce the principle portion of the loan and assuming there is interest paid, it will be expensed.

I understand... The thing is that we owed Paul 100, and we received from Peter 200 to pay off Paul and the rest to use it as growing capital... So i understand that the principal will be reduced with monthly payment, my issue is how to match the numbers on balance sheet, so Paul's loan is 0 and Peter's loan is 200. 

It depends on the actual money flow.  You have not told us the exact flow.

I am going to assume two transactions.  Remember, follow the money and stick to reality as much as possible.

Receipt of Money

Debit Bank 200

Credit Owing Peter Liability 200

Pay Paul

Debit Owing Paul Liability 100

Credit Bank 100

Balance of bank up by 100

Balance of Owing Paul Liability down 100

Balance of Owing Peter Liability up by 200

That make sense and it worked. Thank You.

Hi Margaret, if the above suggested answer helped, please do mark it as verified  for the benefit of others in this forum :). Thank you!

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