Long term loan setup and recurring payment in sage

Question

Hello. 
 I've never done enter long term loan to sage. This company has a several long term loans (purchased apartments for rental) 
 I need to help with: 
 1 - New long term loan set up to Sage 
 2 - How to change previous long term loan amount to new refinanced loan amount? (refinanced loan and need to enter a new amount and new loan calculation) I'm working on loan amortization. Some reason (which I'm sure I didn't enter correct number) I do not have same monthly loan amount as bank calculation. 
 I will provide more info if need to have. Same as previous company, no one do not know how to enter to Sage. Thank you so much for your support!

Art Minds · Accepted Answer

This is partially an accounting question and partially a Sage data entry question. I would suggest you consult your company's CPA regarding the setup and amortization of the loan. Within Sage, you may need to know how to create a new General Ledger Account and know how to enter a journal entry to record the loan payable amount and the asset (apartment building). Each monthly loan payment very likely consists of principle and interest. When you make each payment you will allocate a portion of the payment to interest (debit interest expense) and a portion to reduction of principal (debit loan account). The offsetting credit entry is to cash when you print the check. You could use the recurring transactions feature to automatically prompt the creation of the payment, needing only to change the amounts allocated to Principle and Interest according to your (or the bank's) amortization schedule. At year end, it's likely you'll make an adjusting entry to adjust the interest paid and principle balance to a statement provided by the lender.

Char DeLange · Answer

I would set up the loan payment as a recurring journal entry just for the payment by debiting the long term liability and crediting cash (assuming it's an auto deduct from checking) OR as recurring AP invoice if you need to print the check. Then set up a second recurring journal entry to post the monthly interest to debit interest expense and credit the long term liability acct. You can hold off posting the interest until you get the bank statement that shows you the amount of interest to post. But you may still need a journal entry at year end to reconcile the balance. If this was for a vehicle and you have the equipment module you would set up the interest and payment on the piece of equipment.

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Long term loan setup and recurring payment in sage

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