How does one create an account...

Posted by aunst8_2000 on April 18, 2007, 1:55 am

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I lent money to John Smith at 5% interest. What type of account
should I create to keep track of it? I don't want it in my cash-flow
center... it belongs more in the investment center but those types of
account have a different register display. Would it be considered a
negative liability? :)

I'm also going to invest in real-estate. What about that type of
account?

Thanks
-Ed

Posted by R. C. White on April 18, 2007, 10:03 am

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Hi, Ed.

Which version of Quicken are you using?

I'm running Quicken 2007 Basic in Vista Ultimate x64.

By lending money, you have created an asset called a "receivable". Whether
you call it a Note Receivable, a Loan Receivable, an Account Receivable or
something else, it is an asset to you. It IS cash flow - out, of course -
and will some day generate a cash flow in, you hope.

In Quicken, there are several ways to get to the Account List; <Ctrl>+A may
be the quickest. On this screen, click Add Account in the menu bar at the
top right. On the next screen, click This account is not held at a
financial institution. On the next screens, click Asset under Property &
Debt, then name your new account (Receivable from John Smith?), and enter
zero as the "ending balance on the [prior] statement".

Yes, you could consider it a negative liability, but Asset is a better term.

Since Quicken's Investment Accounts are designed for marketable securities,
your best choice for a real estate investment is an Asset Account. You
probably will want a separate account for each property, but I'll leave that
discussion for later - and for other readers here who are more experienced
than I in using Quicken to manage and account for real estate.

RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Currently running Vista Ultimate x64)

>I lent money to John Smith at 5% interest. What type of account

> should I create to keep track of it? I don't want it in my cash-flow

> center... it belongs more in the investment center but those types of

> account have a different register display. Would it be considered a

> negative liability? :)

> I'm also going to invest in real-estate. What about that type of

> account?

> Thanks

> -Ed

Posted by John Pollard on April 18, 2007, 10:40 am

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aunst8_2000@yahoo.com wrote:

> I lent money to John Smith at 5% interest. What type of

> account should I create to keep track of it? I don't

> want it in my cash-flow center... it belongs more in the

> investment center but those types of account have a

> different register display. Would it be considered a

> negative liability? :)

If you want to track the interest and principal in Quicken, you
may want to use the Quicken Loan Wizard to create the Loan
account for you; Quicken will correctly create an Asset account
when you are the lender. Quicken will create a complete loan
payment schedule for the loan, which you can use with a
Scheduled Transaction or a Memorized Payee to have the correct
amount of each payment assigned to principal and interest.

--
John Pollard
First initial underscore Last name at mchsi dot com
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