Software: QuickBooks accounting software
Assuming the company is giving an interest free loan of $10,000.00 to “Staff A” and will deduct $500.00 monthly from his salary as a repayment for 20 months.
Before recording this transaction into QuickBooks, first you need to setup the Staff Loan account as an Other Current Asset type of account.
Next, use the Write Cheque function in QuickBooks to issue a cheque to “Staff A” for $10,000.00 and associate it with the Staff Loan account.
Assuming the monthly salary for “Staff A” is 3,000.00; you can deduct the 500.00 monthly staff loan repayment from the pay cheque directly. In the Write Cheque transaction:
The double entry for this write cheque transaction will be:
Debit Salary expense account: 3,000.00
Credit Staff Loan asset account: 500.00
Credit Bank account: 2,500.00