Loan account entries
We have a number of long term loans whereby we had not initially recorded the beginning loan amount. This is because the bank account where the loan amounts were deposited is not kept track of through our QuickBooks system. We have been posting the payments from our bank account which is in our QuickBooks system for the loan to a long term liability account which I have recently separated into various long term liability accounts to allow distinction between the loans. In putting in the original amount for each loan, QuickBooks either calls for the debit entry to be a posting to a newly created bank account, or an entry to show "OPENING BALANCE EQUITY". Since the bank account which the money went into is not a bank which we show in our QuickBooks system, I have posted the debit side of the entry to the "OPENING BALANCE EQUITY" account. Could someone advise me on whether this is the best way to handle this? Also, once any of the loans are paid off resulting in a zero balance in the liability account, do I need to make an adjusting entry in regard to that "OPENING BALANCE EQUITY" account?