Account for Mortgage Balances & Back Interest in QuickBooks

September 30, 2023

Q: I use QuickBooks for property management. I currently owe late fees and back interest on a mortgage. How do I record these amounts in QuickBooks?

A: When repaying a loan, you pay the principal amount (what you borrowed) and interest (a percentage of the principal that you have committed to pay). Back interest are interest amounts that you owe from a previous statement. Pick a date from one of the statements. Create a liability account and enter the owed amount as the opening balance.

Depending if the property is a rental or a flip, your accounts could be expense, asset or liability.

Gita Faust

About the Author

Gita Faust has over 30 years of accounting experience in the real estate and property management industry, Gita Faust is more than just a real estate investor; she is also popular for her work as an accountant, consultant, mentor, speaker, QuickBooks Top ProAdvisor, QuickBooks Solution Provider, member of Intuit’s Trainer/Writer Network, and, of course, author. Gita is well-known for her exemplary leadership and advisory skills. In fact, she even helped pioneer the adaptation of QuickBooks to suit the needs of professionals in real estate and property management. To share her knowledge she has written a series of courses titled Simplified Accounting Solution, which provides step-by-step guidance for those working with QuickBooks.

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