 is the reason that we have adjusting entries in the first place to not have to do things that are too tedious during the bookkeeping process but still be able to shore them up to make the financial statement reporting correct at the end when we actually present the financial statements month end quarter end year end. So we're just simply going to reverse the the entry we did closing this long-term portion back into the the current portion so that everything is represented with this one account so that when the bookkeeper makes the next payment they can just do the same thing they normally do according to the amortization schedule and put it to that normal current account and tie out to the balance for that current account. All right so let's do that so note that if I go in here we could do this a couple different ways if I look at the reversing entry here's the journal entry if I if I go into it QuickBooks has this pretty neat just reverse thing down here now which will reverse it exactly so we could use that that would be the easiest thing to do but since there's only two accounts affected we can also kind of use the register so let's practice using the register and then we'll look at the journal entry so I'm going to close this out and then I'm going to go back and then I'm going to go into the first tab and let's go down to the transactions and into the chart of accounts close up the hand buggy and then we're looking for the account type of current liabilities so we've got other current liabilities then I'm looking for the loans here's the two loans you can see them with these indented items and so what I want is this loan that had the current portion I can use the register on any balance sheet account this is an a reversing entry that doesn't have an income statement portion to it it's only a balance sheet activity so I could use either the short term or the long term if I go down to the long term I could use either one to do the entry in so let's go back to the short term I think that's where we entered last time and I'll go into the register with that one and we're going to say actually maybe it would even be easier to go into the long term let's go back the long term might be easier to see because it'll close out to zero let's go into the long term one so I'm getting confused I'm confusing people but here's this one let's go into this register here for the chase and so this one needs to go down to zero so that's easy to see so I'm gonna go okay let's hit the drop down let's make a journal entry to do that as of the day after the cutoff date the cutoff date for us was 229 the end of February so 0301 24 reversing entries always the day after I'm going to call it a reversing entry and tree and then I'm gonna say that it's gonna decrease by the amount that's in there 56769.59 bringing it back down to zero the other side's gonna go into loan payable short-term portion there's this one for chase and that should bring it back to the current balance including both short and long term all right let's close it or save it which will close it and then we'll go into it again edit it see it as a journal entry so you can see now I'm gonna copy the reversing and put it in the description on both line items so you can see now that the loan payable we reversed it the long term portion we debited bringing it down it was you know at 56769 59 it's gonna go back down to zero and then we're gonna credit or increase the current portion so that the whole loan is represented in that one account under the current liability let's save and close it and then we'll check it out I think that looks good thus far so we've done well we're gonna go over to the balance sheet here and then and then run it and let's see what we have we're gonna go down and say that we have been in the current liabilities the the as of so as of the cutoff date it's at 13108 54 and then we reversed it back to this 69879 13 which matches the full balance on the amortization schedule so that if the bookkeepers making payments according to the amortization schedule they can just worry about that one account making the decrease to cash recording the interest portion and the reduction of the principal which will make the new total loan balance in one account go down to 688 1056 so that's the general idea if I go to the long-term side of things we broke out the long-term portion for the purposes of reporting and then we closed it back out so that the bookkeeper doesn't need to work worry about it even if we're the bookkeeper internally if I go into one of these accounts you can see that here it is with a journal entry there's the adjusting entry if I bring it up to 131 we have the reversing entries so we enter the adjusting entry and then we simply reversed it right back out okay so that's the idea looks movie be to the end so let's go ahead and take a look at our trial balance see where we stand well this is where we are in the balance sheet to do to do and I'm going fast and then here it is on the income statement we didn't do anything to the income statement so nothing happened there it's the same low mizmo and we're going to go to the tab to the right and then here's our trustee trial balance so February is the cutoff we didn't do anything to February this time we reversed what we did to February in a prior presentation on the loan payable short-term versus the long-term portions where was the short-term short-term versus the long-term portions income statement remains the same