Loan paid directly to the vendor

Question

Hello, 
 How to post a loan that is paid directly to our vendor. The money doesn't touch our account. 
 
 Thanks for any help, 
 Margaret

Erzsi_I · Answer

Hi Margaret Kasza , 
 Thanks for reaching out. To post a loan that is paid directly to a vendor without the money touching your account, you may follow a slightly modified version of the steps outlined for creating a loan to a vendor: 
 
 Add the vendor to whom the loan is paid directly. 
 Instead of creating a loan payable account, since the money doesn't touch your account, create a journal entry to reflect the transaction. 
 In the journal entry, debit the expense or asset account that reflects the purpose of the loan to the vendor. 
 Credit the payable account or another relevant liability account to reflect the obligation to repay the loan. 
 
 Since the money doesn't enter your bank account, there's no need to credit the bank account in your books. Remember, this transaction should reflect the reality of the loan and its repayment obligations. If you need to track the repayments, you could then use the payment journal to record the repayments to the loan directly from the bank account. 
 For more detailed steps on recording transactions in Sage 50, you can refer to the article on how to input and pay back a bank loan , which provides steps for both creating the initial transaction and paying back the loan through various methods. You can find more detailed instructions in the articles available at the following URLs: 
 
 How to create (record) a loan to a friend or vendor 
 How to setup a credit line bank account 
 
 If this helps please mark it as verified :) 
 Warm Regards, Erzsi

Sage 50 Canada

Loan paid directly to the vendor

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