Quickbooks Journal Entry – 7 Properties to Commercial Loan
The following is the journal entry I used to record the closing of a commercial loan. In this transaction, I put 7 total properties under a commercial loan, 6 were originally on land contracts and 1 was fully paid off. Here is a summary of each of the line items:
1. Type of account: Long Term Liabilities. The loan value was $245,000.
2. Type of account: Other Current Liabilities. The bank also offered me a line of credit, $4452,96 of which was contributed to closing.
3 – 8. Type of account: Long Term Liabilities. These were the outstanding amounts on the 6 land contracts that were paid off. To get specific, this is the principle balance as of the start of the month that closing took place. In this case, the closing date was July 20th, 2014 so these values were as of July 1st, 2014. After this transaction, there is a zero balance on all of these accounts.
9 – 15. Type of account: Expense. When real estate changes ownership or financing changes, upcoming property taxes need to be paid as part of closing. This was a huge expense but would have had to be paid the next September regardless.
16. Type of account: Expense. Closing costs due to the title company and bank.
17 – 22. Type of account: Expense. These line items are the interest accrued on the 6 land contracts between July 1st and July 30th. Interest is paid in arrears and would have been paid on August 1st with my regular land contract payments.
Cash at closing. Type of account: Checking account. Although not noted below, the actual transaction I edited in Quickbooks was a payment for $11,010 that I brought to closing.
If you have questions about this transaction, feel free to comment below or contact me here.
|1||Commercial Loan||Original amount for commercial loan||-245000|
|2||Line of Credit||Transfer from line of credit||-4452.96|
|3||House 1 Loan||Payoff of House 1 land contract||25342.98||House 1|
|4||House 2 Loan||Payoff of House 2 land contract||31377.17||House 2|
|5||House 3 Loan||Payoff of House 3 land contract||33548.86||House 3|
|6||House 4 Loan||Payoff of House 4 land contract||48077.11||House 4|
|7||House 5 Loan||Payoff of House 5 land contract||28441.13||House 5|
|8||House 6 Loan||Payoff of House 6 land contract||73330.54||House 6|
|9||Property Taxes||House 1 property taxes||1096.81||House 1|
|10||Property Taxes||House 2 property taxes||1849.94||House 2|
|11||Property Taxes||House 3 property taxes||957.78||House 3|
|12||Property Taxes||House 4 property taxes||2613||House 4|
|13||Property Taxes||House 5 property taxes||5533.66||House 5|
|14||Property Taxes||House 6 property taxes||3813.71||House 6|
|15||Property Taxes||House 7 property taxes||1213.08||House 7|
|17||Mortgage Interest||132.88||House 3|
|18||Mortgage Interest||342.55||House 5|
|19||Mortgage Interest||224.55||House 6|
|20||Mortgage Interest||150.67||House 1|
|21||Mortgage Interest||123.45||House 2|
|22||Mortgage Interest||156.74||House 4|