What is the accounting treatment of a long term liability when I make periodic re-payments that include an interest and principal portion that reduce the liability? As an example lets say I purchase a vehicle on loan for 50000. I record an asset and liability amount of 50000 in the balance sheet. In the first month I make a loan re-payment of 1000 of which 400 is interest (which I record as an expense in the income statement) and 600 principal repayment. How do I account for the principal payment ie. what are the journal entries?

QB Issue Resolution:

Normally you use write checks, even if it is an online bill pay, just change the cehck number to EFT

line one is the liability account, 600
line two is the interest expense account, 400

same thing in  a journal entry if you use that

debit banking 1,000

credit the other two accounts

Resolution for Issue 'What is the accounting treatment of a long term liability when I make periodic re-payments that include an interest and principal portion that reduce the liability? As an example lets say I purchase a vehicle on loan for 50000. I record an asset and liability amount of 50000 in the balance sheet. In the first month I make a loan re-payment of 1000 of which 400 is interest (which I record as an expense in the income statement) and 600 principal repayment. How do I account for the principal payment ie. what are the journal entries?' available: Yes (Solved).
Source: Intuit Community forum.

What is the accounting treatment of a long term liability when I make periodic re-payments that include an interest and principal portion that reduce the liability? As an example lets say I purchase a vehicle on loan for 50000. I record an asset and liability amount of 50000 in the balance sheet. In the first month I make a loan re-payment of 1000 of which 400 is interest (which I record as an expense in the income statement) and 600 principal repayment. How do I account for the principal payment ie. what are the journal entries?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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