Transferring Line of Credit Account to Checking Account

Updated September 25, 2026 12:42

Overview

Transferring a line of credit account to the checking account.

Create General Ledger Accounts

There needs to be a GL account number for each LOC account, as well as for each banking account. There also needs to be an expense account for the finance charges.

∙ LOCs will be a “Current Liability” Account Type

∙ The Interest Fees will need to be an “Expense” account type (similar to bank charges)

Create a Journal Entry

Navigator > Journal Entry > New Entry

Notice that the money leaving the LOC is a Credit to the Liability Account and the money entering the Checking account in a Debit.

Recurring Entries

For repetitive entries, simply highlight the desired General Journal Entry, click “copy” at right bottom, rename and date. You will have the option to change the $ amounts on the new entry before Accepting.

Impact of GL Transfer on the Check Register

Go to Navigator > Bank Accounts > Select Checking

Click on the “Register” button (top center)

You will now see the Transfer General Entry listed as a Deposit on the check register

Impact of GL Transfer on the Reconciliation

And likewise, when you to go Navigator > Reconcile > New Rec

Select the checking account.

Ensure that the Statement Date includes the date of the General Journal Entry.

And the transferred amounts will display in the Deposits screen at right.

Paying back the LOC

The lending institution (LOC) needs to be set up as a Vendor.

Notice the Vendor Type is “Service”.

Creating the Payable

Go to Navigator > Accounts Payable > New

Choose the LOC as the Vendor. Enter the full amount due (Principal + Interest)

Distributing the Costs

From the pink Payable screen, click on the “Distribute” button at right. Make sure that both your LOC and LOC interest fees accounts are included in the Distribution List. (If not, use the “Edit List” button to add them.)

In the “Distribute” field, enter the dollar amount to apply back to the LOC,

Select the Account # for the LOC, and watch as that dollar amount distributes to that line.

Once that amount is distributed, the balance of the Payable will now populate the “Distribute” field

Click on the LOC Interest Account # to distribute the interest fees to that account.

The “Distribute” field is now blank, indicating that the balance of the Payable has been satisfied.

Click “Accept” button at bottom.

Cutting the check to the LOC

From the pink Payable screen, click the “Quick Pay” button in top action bar.

Check the LOC payment and change the Payment Account field at bottom to reflect (match) the proper checking account. ( The one that received the money and is now sending it back)