Step 1. Liability Details

1. Choose the Liability Account
   

Note: That if you are unsure of which code to assign to a new chart item, click on the Show Accounts button to view all accounts currently in use, divided into account categories

1. Give the account a Description
   
2. Identify the Source of the loan, i.e. Who is supplying the loan (optional)
   
3. Enter the Amount of the loan
   
4. Enter the Date Received. This must be after the date of the most recent BAS
   
5. Click on the Next button
   

Step 2. Income / Expense Accounts

• Enter a new Income Account to be used to record income (drawdowns or further increases, e.g. unpaid interest accrued). Link to an existing account if desired. A description will automatically be added when the setup is completed.
• Enter a new Expense Account used to record expenses (e.g. loan repayments). Link to an existing account if desired. A description will automatically be added when the setup is completed.
• Click on the Next button.

Step 3. Link to Purchase of Asset

• If you select  'No' - click on the Next button to proceed to Step 4.
• You have now set up a Liability (Loan) Account and the linked Other Income and Other Expense accounts used to show the income and expenses to and from the loan.

• If you select 'Yes' - you want to apply the loan against the purchase of an asset.
• Fill out the details as required
• Click on the Next button

Step 4. Link to Asset / Investment Register

Step 5. Repayment Schedule 

• If you select 'Yes' - fill in the details to setup a regular repayment schedule.
• Frequency - this is how regularly you are going to make your repayments, e.g. weekly, fortnightly, monthly etc.
• Next Due Date -
  
  • This will default according to the Frequency set and the purchase date. (For example: If 'Frequency' was set to 'Monthly' and the purchase date was 01/01/2010, the Next Due Date will be 01/02/2010).
  • Click on the drop down arrow to select a new date using the calendar, if Next Due Date is different.
    
• Number Remaining -
  
  • This is the number of payments left to make before loan is paid off. (For example. if you plan to pay off your loan in 2 years and you are making monthly payments, the Number Remaining will be 24 (2 years = 24 months).
  • Leave blank to repeat until cancelled - scheduled payment will continue until the balance of the loan is paid off.
    
• Repayment amounts are Interest Only - tick this if you are not paying off any of the loan principal and only paying off the interest component of the loan.
• Repayment Amount -
  
  • This amount is automatically calculated if you enter a Frequency, Next Due Date and Number Remaining.
  • If you know how much the repayment is going to be per Frequency (eg. Month) enter this here.
    
• Click on the Finish button to close
  

Note:

• Your repayment is usually made up of two portions: principal and interest. (i.e. a portion is for paying off the interest due on your outstanding loan amount and the remainder goes towards paying off the outstanding loan amount itself ). 
• The Loan Wizard will only set up a Repayment Schedule for principal only or interest only.
  

• If you have selected either Assets or Investment in Step 4 - Link to Asset / Investment Register, you will be taken to relevant register Add window.
• Fill in all applicable information
• Click OK to save

• All transaction details are already entered.
• Click on the 'Bank' drop down menu to select the bank account.
• Click OK button to save transaction.

• Make sure the transaction you wish to process has a tick in the Process column
• Click Process button.  (This will also reset the next due date for each transaction.)
• Click Yes to Confirm message: 'Are you sure that you want to process the 1 selected transaction to bank CTB - Working Account?'
• Click OK to information message: 'Processing Complete"

Note: This transaction has now been entered into Cashbook as at the Due Date. You may wish to edit the transaction and add an explanation in the Notes (Optional) section, that this loan repayment is both Principal & Interest. This is important, so your accountant is aware he/she has to make an adjustment at the end of the financial period.