 QuickBooks Desktop 2023 Reversing entry, loan payable, short-term and long-term portions. Let's do it within 2-its QuickBooks Desktop 2023. Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category, further broken out by course. Each course then organized in a logical, reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Here we are in QuickBooks Desktop. Get great guitars practice file. We started up in a prior presentation going through the setup process. We do every time. We're maximizing the home page. We're going to the view dropdown. We've got the hide icon bar, the open windows list checked off, open windows open on the left. Reports dropdown, company and financial. Let's take a look at that P&L profit and loss change the range 010123. And I'm going to bring this out to 033123. The cutoff is 228 February 28th, but we're going to do a reversing entry the day after and therefore go through the month after 33123. Let's go ahead and customize it fonts and numbers to change up to 14. OK, yes and OK. Reports dropdown again, company and financial. This time the big balance sheet, customizing it same range 010123 to 033123, the month after the cutoff. Let's do the month by month here and then fonts and numbers changing the font. Let's bring it up to 14. OK, yes and OK. So that's the setup process that we do every time. I'm going to make one last change to the profit and loss, making that a month by month comparison as well. So we got the month by month. So there we have that. That's the setup process that we've been doing every time. Last time we did an adjusting entry, which was breaking out the short term and long term portion of the loan payable. You'll recall some of the issues with the loan payable are that if we have multiple loan accounts, we often want to have a different loan account for each loan number one. Also, we have a situation where there's a difference between each payment doing to have an interest portion and a principal portion. Therefore, we typically need the amortization table to help us record those payments. And we typically from a bookkeeping standpoint would like one account per loan so I can tie the loan balance out to the amortization table as I make loan payments. But for reporting purposes, we might have one loan that has a short term and long term portion to it. So that causes a problem for us from a bookkeeping side versus the reporting side of things in order to break out the short term and long term portion. We had to use the amortization table here to determine how much of the payments in the future are short term versus the long term. So we did this calculation last time. We said 12 months out. These are the loan payments that we're going to be making. And therefore, if this is where we stand in total, the short term, the amount that's going to be due within a year is the 1310854. Not including the interest because the interest has not been incurred yet. And then we've got the where we would stand long term after a year, the 56776959, which matches here on the amortization table. Kind of a double check to check that out. Now, of course, we don't that's great for reporting purposes because I want to know what's the short term portion so I can compare that then to my current liabilities to see if I have enough cash, for example, to pay off the loan that's going to be coming due shortly. That's kind of the purpose of short term and long term. But I don't want to have to keep it that way going forward because I don't want to have to have every time I record something to the loan. A payment that is to have to break out short term and long term portion. That would be even more tedious than having to break out the interest and principal, which I already have to do. So what I want to do after having broken it out periodically, monthly or yearly, depending on what the case may be in your particular circumstance or possibly you don't need to do it at all. If you're a small business and you don't think it's adding you value personally and there's no external reporting need for it. But I want to bring it back to what would be easier from the bookkeeping side of things. And that would be bringing this back to one account instead of two. So last time we broke out this long term portion, I'm just going to reverse it this time as of the first day after the cutoff date. So let's do that by going to the view drop. Let's do another list dropdown and let's go to the chart of accounts. And I can go into either of these accounts because they're both balance sheet accounts. They both have registers in other words, that being the short term portion, the long term portion. I think the long term portion is easier to look at possibly because I need to bring it back to zero, which is easy to determine how to do. So I'm going to double click on it, taking us into the register. We're going to go into March, which is the first day, the next day. And then I'm just going to say, well, it increased last time. I got to bring it down to a donut. So I'm going to decreases to 56769.59. And the other side is going to go to the other loan account loan payable for the short term to 791. And this will be a reversing entry and enter brings it back to zero. If I want to see the journal entry, which I do, then I can double click right here right there. There it is. I'm going to copy the memo, copy, control, see and paste that on both lines. Both lines need a memo, memo lines. I'm going to save it and close it and then close this back out. And let's check out the balance sheet again. So now we've got the breakout as of the cutoff date, but back down to one account as of the day after the cutout date. So it's not going to mess up our bookkeeping process. We have the short term portion before the cutoff at the 13108.54. But back to 56769.59. I'm sorry, back to 6987.813, which is the full amount in long term and short term portion after the cutoff. And then there's nothing in the long term portion after the cutoff, not because we don't have any long term component, but because I don't want to have multiple loan accounts to be tracking when I'm only tracking one loan. That's confusing. That's the point. If I double click on this, then if I let's go into one of these and check out the detail, double clicking on it, there's the journal entry reversing, bringing us back from short term to the long term. It's in a journal entry format, of course, closing this back out. And then we have the adjusting journal entry over here, double clicking in on that. There's the adjusting entry that we reverse the next day. So if I took this up to the next day, boom, there they are going in and out, making it right for the cutoff just for one day and then reversing it back out so it doesn't mess up things going forward. Here's the same thing. Here's the reversal, the reversing entry. And over here, we still have the adjusting entry. If I go one day out, boom, bam, in, out. But it's a key in timing because you got the 228 is correct. And then we reversed it out so you don't mess things up going forward. No impact on the P to the L, the profit and the loss. And this is again, a little bit different for than a classical adjusting entry, which usually has a timing component to it, but is still kind of an adjusting entry in the sense that we are planning what to do during the accounting process, the bookkeeping to make it as easy as possible logistically and then take periodic adjustments at the end of the month or year so that we can make things go smoothly and still be correct on reporting for reporting purposes periodically as the needs dictate. Okay, so there's the process. Let's take a look at our journal entries. Thus far reports, dropdown, accounting and taxes. Let's take a look at the journal report for five or from 022823 to 022823. Let's customize it and filter it. Let's do the transactions here and let's just look at the journals as we've seen before reports change the fonts. Let's bring it up to 11. Okay. Yes. Okay. Expand it a bit so we can actually see stuff without I just I want to see something more than just like dots three dots don't help me at all. I want to see the stuff that's in it. So this is what we've done thus far for the adjusting entries. And then we've got this is the latest in the adjusting entry that we did last time. Now I'm going to bring it up a notch and date wise that means I mean and that's going to give us to our reversing entry and that's one of the ones we reversed. And this time this is the reversal that we have just done. All right. Let's take a look at our trial balance to check our numbers. The trusty TB trial balance changing the range in from 010128 to 0228 to 0123 to 022823 and then customizing it. Fonts and numbers changing the font bringing it up to 16. Oh yeah. Okay. This is where we stand as of the cutoff date should remain the same from the prior presentation because we didn't do anything to anything before the cutoff date but we'll check it in any case. And then we're going to bring it up but bring it up a notch. 033123 I'm going to bring it all the way to the end of March because we entered this the day after the cutoff date and this is where we stand as of the end of the following month just so we can check our numbers thusly as well.