# My loan payment comes out of the bank as one number — how do I split it between principal and interest, and where do I get the split? - **[US · borrowers making payments on a loan]** A loan payment usually contains two parts — an interest payment and a principal payment; the article states this as the usual case, not as an invariable or exhaustive rule. → [CG-MCE-081#S01](#s-CG-MCE-081-S01) - **[United States · fixed-payment fixed-rate amortizing loans of the kind tabulated in Table 8.4]** Because the payments are fixed and the remaining debt is decreasing, the monthly interest portion is always decreasing and the principal portion must therefore be increasing — so the split between the two changes from period to period. → [CG-MCE-081#S06](#s-CG-MCE-081-S06) - **[United States · fixed-payment fixed-rate loans of the kind tabulated in Table 8.4]** Each fixed payment in the amortization table contains both interest and principal repayment. → [CG-MCE-081#S11](#s-CG-MCE-081-S11) - **[SBA Loan Portal · United States · Borrowers of SBA COVID-19 EIDL, SBA disaster, PPP (guaranty-purchased for payments), 7(a) (guaranty-purchased SBA-serviced for payments) and 504 (debenture-purchased) loans]** SBA states that the SBA Loan Portal replaces the Capital Access Financial System (CAFS), and that a borrower holding one of the loan types it lists — COVID-19 EIDL, SBA disaster loans, PPP loans (payments only available for guaranty-purchased loans), 7(a) loans (payments only available for guaranty-purchased SBA-serviced loans) and 504 loans (only debenture-purchased) — will be able to log in to view loan details, access statements, and make payments. → [CG-MCE-081#S16](#s-CG-MCE-081-S16) ## What this page establishes - What each part does, and what sets the proportion in any given period — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.) - What the amortisation schedule and the lender's statement each give you — Not established (Required authority: authoritative lender insurer or program documentation. Highest achieved: high quality professional secondary reference.) - What you can ask the lender or servicer for — Partly established - Which account each component is posted to — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.) - How and how often the recorded obligation is verified — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.) - Correcting periods that are already closed or reported — Not established - When that accrual is required, and how your accounting basis affects it — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.) - Why one payment out of the bank is really two things — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.) - Where this period's split comes from — Not established (Required authority: authoritative lender insurer or program documentation. Highest achieved: high quality professional secondary reference.) - When you have neither a schedule nor a statement — Partly established (Required authority: authoritative lender insurer or program documentation, authoritative professional or accounting standard. Highest achieved: primary regulator or government.) - The split changes every period, so a fixed recurring split drifts — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.) - Posting the payment as one transaction with two components — Established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation.) - Escrow, taxes and fees bundled into the same payment — Not established (Required authority: authoritative lender insurer or program documentation, authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.) - Check your recorded loan balance against the lender's — Not established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.) - Fixing a run of payments posted entirely to one account — Not established - Interest incurred but not yet paid at your reporting date — Partly established (Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference.) ## Why one payment out of the bank is really two things - A loan payment usually contains two parts — an interest payment and a principal payment; the article states this as the usual case, not as an invariable or exhaustive rule. _(jurisdiction: US, entity_scope: borrowers making payments on a loan, conditions: hedged with "usually"; the article does not say every loan payment has these parts or that no other component can exist)_ `CG-MCE-081#S01` > “It usually contains two parts, which are an interest payment and a principal payment.” — [AccountingTools, Inc. (author Steven Bragg) — How to record a loan payment that includes interest and principal](https://www.accountingtools.com/articles/how-to-record-a-loan-payment-that-includes-interest-and-principal), 2026-07-03; Section "What is a Loan Payment?", second sentence (TEXT.txt line 84). Verified 2026-09-09. - In the article's example journal entry, the $3,000 principal portion of the payment is recorded as a debit to Loans Payable, which the article identifies as a liability account. _(jurisdiction: US, entity_scope: the article's illustrative example company (Absolution Corporation), conditions: illustrative example entry with assumed amounts)_ `CG-MCE-081#S02` > “Debit of $3,000 to Loans Payable (a liability account)” — [AccountingTools, Inc. (author Steven Bragg) — How to record a loan payment that includes interest and principal](https://www.accountingtools.com/articles/how-to-record-a-loan-payment-that-includes-interest-and-principal), 2026-07-03; Section "Example of a Loan Payment", first line of the journal entry (TEXT.txt line 87). Verified 2026-09-09. - In the article's example journal entry, the $1,000 interest portion of the payment is recorded as a debit to Interest Expense, which the article identifies as an expense account. _(jurisdiction: US, entity_scope: the article's illustrative example company (Absolution Corporation), conditions: illustrative example entry with assumed amounts)_ `CG-MCE-081#S03` > “Debit of $1,000 to Interest Expense (an expense account)” — [AccountingTools, Inc. (author Steven Bragg) — How to record a loan payment that includes interest and principal](https://www.accountingtools.com/articles/how-to-record-a-loan-payment-that-includes-interest-and-principal), 2026-07-03; Section "Example of a Loan Payment", second line of the journal entry (TEXT.txt line 88). Verified 2026-09-09. - In the auto loan example, of the 36 payments of $973.50, $32,000 is repayment of the principal borrowed and the remaining $3,046.08 is the lender's revenue, described as the cost of credit. _(jurisdiction: United States, entity_scope: the illustrative three-year, 6%, $32,000 auto loan, conditions: 36 monthly payments of $973.50; other charges, fees, taxes and extras are excluded from this example)_ `CG-MCE-081#S04` > “Of the 36 payments of $973.50, $32,000 has been repaid as the principal borrowed. The remaining $3,046.08 is the lender’s revenue, the cost of credit.” — [OpenStax, Rice University — Principles of Finance — 8.3 Loan Amortization](https://openstax.org/books/principles-finance/pages/8-3-loan-amortization), 2026-04-23; Section 8.3 Loan Amortization — bulleted details immediately following Table 8.4, “Extracts from an Amortization Table ($)” (totals row of Table 8.4). Verified 2026-09-09. _Partly established. Established: one component reduces an obligation already on the balance sheet (S02); the other component is a cost of the period (S03). Missing: why the payment must be divided._ _Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._ ## What each part does, and what sets the proportion in any given period - See above: A loan payment usually contains two parts — an interest payment and a principal payment; the article states this as the usual case, not as an invariable or exhaustive rule. ([CG-MCE-081#S01](#s-CG-MCE-081-S01)) - Later in the loan, as the principal balance is gradually paid down, the interest portion of the payment declines while the principal portion increases — the article ties the change in the split to the paying down of the principal balance. _(jurisdiction: US, entity_scope: borrowers making payments on a loan, conditions: applies as the principal balance is gradually paid down)_ `CG-MCE-081#S05` > “Later, as the principal balance is gradually paid down, the interest portion of the payment will decline, while the principal portion increases.” — [AccountingTools, Inc. (author Steven Bragg) — How to record a loan payment that includes interest and principal](https://www.accountingtools.com/articles/how-to-record-a-loan-payment-that-includes-interest-and-principal), 2026-07-03; Section "What is a Loan Payment?", fourth sentence (TEXT.txt line 84). Verified 2026-09-09. - Because the payments are fixed and the remaining debt is decreasing, the monthly interest portion is always decreasing and the principal portion must therefore be increasing — so the split between the two changes from period to period. _(jurisdiction: United States, entity_scope: fixed-payment fixed-rate amortizing loans of the kind tabulated in Table 8.4, conditions: payments are fixed; the amount of remaining debt is decreasing)_ `CG-MCE-081#S06` > “Because the payments are fixed and the amount of remaining debt is decreasing, the monthly interest portion is always decreasing, and the amount of principal payment therefore must be increasing.” — [OpenStax, Rice University — Principles of Finance — 8.3 Loan Amortization](https://openstax.org/books/principles-finance/pages/8-3-loan-amortization), 2026-04-23; Section 8.3 Loan Amortization — bulleted details immediately following Table 8.4, “Extracts from an Amortization Table ($)”. Verified 2026-09-09. _Not established from an authoritative source._ _Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._ ## The split changes every period, so a fixed recurring split drifts - See above: Later in the loan, as the principal balance is gradually paid down, the interest portion of the payment declines while the principal portion increases — the article ties the change in the split to the paying down of the principal balance. ([CG-MCE-081#S05](#s-CG-MCE-081-S05)) - See above: Because the payments are fixed and the remaining debt is decreasing, the monthly interest portion is always decreasing and the principal portion must therefore be increasing — so the split between the two changes from period to period. ([CG-MCE-081#S06](#s-CG-MCE-081-S06)) - The principal portion of the payment will gradually increase over the term of the loan. _(jurisdiction: US, entity_scope: borrowers making payments on a loan, conditions: stated over the term of the loan)_ `CG-MCE-081#S08` > “This means that the principal portion of the payment will gradually increase over the term of the loan.” — [AccountingTools, Inc. (author Steven Bragg) — How to record a loan payment that includes interest and principal](https://www.accountingtools.com/articles/how-to-record-a-loan-payment-that-includes-interest-and-principal), 2026-07-03; Section "What is a Loan Payment?", fifth (final) sentence (TEXT.txt line 84). Verified 2026-09-09. - In the example, a $2,000 prepayment at month 36 — about 2.5 months' worth of payment — pays the debt off almost 6 months ahead of schedule and reduces total interest from over $56,000 to $55,000, so the scheduled period-by-period split no longer holds. _(jurisdiction: United States, entity_scope: the illustrative 20-year, 3.6%, $140,000 mortgage with a $2,000 prepayment at month 36, conditions: loan agreement allows the full amount to be applied to the unpaid balance; figures specific to this example)_ `CG-MCE-081#S09` > “While this might seem equal to just 2.5 months’ worth of payment, the debt is fully paid off almost 6 months ahead of schedule, and total interest is reduced from over $56,000 to $55,000.” — [OpenStax, Rice University — Principles of Finance — 8.3 Loan Amortization](https://openstax.org/books/principles-finance/pages/8-3-loan-amortization), 2026-04-23; Section 8.3 Loan Amortization — final paragraph, accelerated-payment (prepayment) discussion. Verified 2026-09-09. _Partly established. Established: the proportion between the components changes every period (S06). Missing: why a recurring entry with a fixed split drifts from the true obligation._ _Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._ ## Where this period's split comes from - Loan amortization is described as a schedule of how and when a debt will be repaid with interest. _(jurisdiction: United States, entity_scope: fixed-rate debts of the kinds the section addresses)_ `CG-MCE-081#S10` > “Loan amortization refers to a schedule of how and when a debt will be repaid with interest.” — [OpenStax, Rice University — Principles of Finance — 8.3 Loan Amortization](https://openstax.org/books/principles-finance/pages/8-3-loan-amortization), 2026-04-23; Section 8.3 Loan Amortization — heading “Calculating Loan Payments Using Simple Amortization”. Verified 2026-09-09. - Each fixed payment in the amortization table contains both interest and principal repayment. _(jurisdiction: United States, entity_scope: fixed-payment fixed-rate loans of the kind tabulated in Table 8.4, conditions: payments are fixed)_ `CG-MCE-081#S11` > “Each fixed payment contains both interest and principal repayment.” — [OpenStax, Rice University — Principles of Finance — 8.3 Loan Amortization](https://openstax.org/books/principles-finance/pages/8-3-loan-amortization), 2026-04-23; Section 8.3 Loan Amortization — bulleted details immediately following Table 8.4, “Extracts from an Amortization Table ($)”. Verified 2026-09-09. - The bank will state the amount of the monthly payment for interest and principal repayment; the text works the same amount out independently for demonstration. _(jurisdiction: United States, entity_scope: the illustrative 20-year, 3.6%, $140,000 home mortgage from a bank, conditions: payment stated is for interest and principal repayment only)_ `CG-MCE-081#S12` > “What will the amount of your monthly payment be for the interest and principal repayment? The bank will tell you, of course, but let’s prove it for ourselves.” — [OpenStax, Rice University — Principles of Finance — 8.3 Loan Amortization](https://openstax.org/books/principles-finance/pages/8-3-loan-amortization), 2026-04-23; Section 8.3 Loan Amortization — 20-year home mortgage example, paragraphs introducing Table 8.5. Verified 2026-09-09. - SBA states that the SBA Loan Portal replaces the Capital Access Financial System (CAFS), and that a borrower holding one of the loan types it lists — COVID-19 EIDL, SBA disaster loans, PPP loans (payments only available for guaranty-purchased loans), 7(a) loans (payments only available for guaranty-purchased SBA-serviced loans) and 504 loans (only debenture-purchased) — will be able to log in to view loan details, access statements, and make payments. _(jurisdiction: United States, entity_scope: Borrowers of SBA COVID-19 EIDL, SBA disaster, PPP (guaranty-purchased for payments), 7(a) (guaranty-purchased SBA-serviced for payments) and 504 (debenture-purchased) loans, platform: SBA Loan Portal)_ `CG-MCE-081#S16` > “The SBA Loan Portal  replaces the Capital Access Financial System (CAFS). If you have one of the loans listed below, you will be able to log in to view loan details, access statements, and make payments. COVID-19 EIDL SBA disaster loans Paycheck Protection Program (PPP) loans (payments only available for guaranty-purchased loans) 7(a) loans (payments only available for guaranty-purchased SBA-serviced loans) 504 loans (only debenture-purchased)” — [U.S. Small Business Administration — Make a payment to SBA](https://www.sba.gov/funding-programs/loans/make-payment-sba), Web page as retrieved September 9, 2026; snapshot sha256 9b99443dc37acd1de298120498b802f13654588a7676d83fa2b0c009c07aba5c; Section "SBA Loan Portal". Verified 2026-09-09. - SBA states that a borrower can check loan balances and payment due dates by logging in to the SBA Loan Portal. _(jurisdiction: United States, entity_scope: Borrowers of the SBA loan types served by the SBA Loan Portal, platform: SBA Loan Portal)_ `CG-MCE-081#S17` > “You can check loan balances and payment due dates by logging in to the  SBA Loan Portal .” — [U.S. Small Business Administration — Make a payment to SBA](https://www.sba.gov/funding-programs/loans/make-payment-sba), Web page as retrieved September 9, 2026; snapshot sha256 9b99443dc37acd1de298120498b802f13654588a7676d83fa2b0c009c07aba5c; Section "View loan statements and payment due dates". Verified 2026-09-09. _Not established from an authoritative source._ _Required authority: authoritative lender insurer or program documentation. Highest achieved: high quality professional secondary reference._ ## What the amortisation schedule and the lender's statement each give you - See above: Loan amortization is described as a schedule of how and when a debt will be repaid with interest. ([CG-MCE-081#S10](#s-CG-MCE-081-S10)) - See above: Each fixed payment in the amortization table contains both interest and principal repayment. ([CG-MCE-081#S11](#s-CG-MCE-081-S11)) - The text notes that a lender might include other charges, fees, taxes or extras in the payments, and states that its own examples set those aside and deal only with interest and principal repayment. _(jurisdiction: United States, entity_scope: the section's worked loan examples; the charges are ones the reader's own lender might include, conditions: stated as what a lender “might” include, not what every lender does; the charges are not enumerated exhaustively)_ `CG-MCE-081#S14` > “For our examples, we will ignore any other charges, fees, taxes, or extras that your lender might include in these payments, and we will focus only on interest and principal repayment.” — [OpenStax, Rice University — Principles of Finance — 8.3 Loan Amortization](https://openstax.org/books/principles-finance/pages/8-3-loan-amortization), 2026-04-23; Section 8.3 Loan Amortization — heading “Calculating Loan Payments Using Simple Amortization” — three-year, 6%, $32,000 auto loan example. Verified 2026-09-09. - See above: SBA states that the SBA Loan Portal replaces the Capital Access Financial System (CAFS), and that a borrower holding one of the loan types it lists — COVID-19 EIDL, SBA disaster loans, PPP loans (payments only available for guaranty-purchased loans), 7(a) loans (payments only available for guaranty-purchased SBA-serviced loans) and 504 loans (only debenture-purchased) — will be able to log in to view loan details, access statements, and make payments. ([CG-MCE-081#S16](#s-CG-MCE-081-S16)) - See above: SBA states that a borrower can check loan balances and payment due dates by logging in to the SBA Loan Portal. ([CG-MCE-081#S17](#s-CG-MCE-081-S17)) _Not established from an authoritative source._ _Required authority: authoritative lender insurer or program documentation. Highest achieved: high quality professional secondary reference._ ## When you have neither a schedule nor a statement - See above: SBA states that the SBA Loan Portal replaces the Capital Access Financial System (CAFS), and that a borrower holding one of the loan types it lists — COVID-19 EIDL, SBA disaster loans, PPP loans (payments only available for guaranty-purchased loans), 7(a) loans (payments only available for guaranty-purchased SBA-serviced loans) and 504 loans (only debenture-purchased) — will be able to log in to view loan details, access statements, and make payments. ([CG-MCE-081#S16](#s-CG-MCE-081-S16)) - See above: SBA states that a borrower can check loan balances and payment due dates by logging in to the SBA Loan Portal. ([CG-MCE-081#S17](#s-CG-MCE-081-S17)) - SBA states that to request a payoff amount a COVID-19 EIDL borrower should contact COVID-19 EIDL Customer Service at 833-853-5638 (TTY:711) from 8:00 a.m. to 8:00 p.m. ET Monday through Friday, email COVIDEIDLServicing@sba.gov, or send a message through the SBA Loan Portal. _(jurisdiction: United States, entity_scope: COVID-19 EIDL borrowers, platform: SBA Loan Portal, conditions: borrower is requesting a payoff amount)_ `CG-MCE-081#S18` > “To request a payoff amount, contact COVID-19 EIDL Customer Service at 833-853-5638 (TTY:711) from 8:00 a.m. to 8:00 p.m. ET, Monday through Friday, email  COVIDEIDLServicing@sba.gov , or send a message through the  SBA Loan Portal .” — [U.S. Small Business Administration — Make a payment to SBA](https://www.sba.gov/funding-programs/loans/make-payment-sba), Web page as retrieved September 9, 2026; snapshot sha256 9b99443dc37acd1de298120498b802f13654588a7676d83fa2b0c009c07aba5c; Section "Make payments" > "Pay your loan in full". Verified 2026-09-09. - SBA states that for PPP, 7(a), 504 and Microloans the borrower should contact their lender for help with their account balance, due date, or any other specifics of these loans, and that for SBA-purchased loans the borrower should contact the SBA loan servicing center listed on their account statement. _(jurisdiction: United States, entity_scope: Borrowers of SBA PPP, 7(a), 504 and Microloan products, including SBA-purchased loans)_ `CG-MCE-081#S19` > “PPP, 7(a), 504 and Microloans:  Please contact your lender for help with your account balance, due date, or any other specifics of these loans. For SBA-purchased loans, please contact the  SBA loan servicing center  listed on your account statement.” — [U.S. Small Business Administration — Make a payment to SBA](https://www.sba.gov/funding-programs/loans/make-payment-sba), Web page as retrieved September 9, 2026; snapshot sha256 9b99443dc37acd1de298120498b802f13654588a7676d83fa2b0c009c07aba5c; Section "Get help", bullet "PPP, 7(a), 504 and Microloans:". Verified 2026-09-09. _Partly established. Established: what can be obtained from the lender when neither a schedule nor a statement is available (S16, S17, S19). Missing: how the payment is recorded until the allocation is known._ _Required authority: authoritative lender insurer or program documentation, authoritative professional or accounting standard. Highest achieved: primary regulator or government._ ## What you can ask the lender or servicer for - See above: SBA states that the SBA Loan Portal replaces the Capital Access Financial System (CAFS), and that a borrower holding one of the loan types it lists — COVID-19 EIDL, SBA disaster loans, PPP loans (payments only available for guaranty-purchased loans), 7(a) loans (payments only available for guaranty-purchased SBA-serviced loans) and 504 loans (only debenture-purchased) — will be able to log in to view loan details, access statements, and make payments. ([CG-MCE-081#S16](#s-CG-MCE-081-S16)) - See above: SBA states that a borrower can check loan balances and payment due dates by logging in to the SBA Loan Portal. ([CG-MCE-081#S17](#s-CG-MCE-081-S17)) - See above: SBA states that to request a payoff amount a COVID-19 EIDL borrower should contact COVID-19 EIDL Customer Service at 833-853-5638 (TTY:711) from 8:00 a.m. to 8:00 p.m. ET Monday through Friday, email COVIDEIDLServicing@sba.gov, or send a message through the SBA Loan Portal. ([CG-MCE-081#S18](#s-CG-MCE-081-S18)) - See above: SBA states that for PPP, 7(a), 504 and Microloans the borrower should contact their lender for help with their account balance, due date, or any other specifics of these loans, and that for SBA-purchased loans the borrower should contact the SBA loan servicing center listed on their account statement. ([CG-MCE-081#S19](#s-CG-MCE-081-S19)) _Partly established. Established: what a borrower can obtain from a lender when no schedule or statement is available (S16, S17, S19). Missing: how the payment is recorded until the allocation is known._ ## Posting the payment as one transaction with two components - See above: In the article's example journal entry, the $3,000 principal portion of the payment is recorded as a debit to Loans Payable, which the article identifies as a liability account. ([CG-MCE-081#S02](#s-CG-MCE-081-S02)) - See above: In the article's example journal entry, the $1,000 interest portion of the payment is recorded as a debit to Interest Expense, which the article identifies as an expense account. ([CG-MCE-081#S03](#s-CG-MCE-081-S03)) - In the article's illustrative example, a company makes a monthly loan payment of $4,000 made up of $1,000 interest and $3,000 principal, and its accountant records that payment as one journal entry; this is an example, not a requirement. _(jurisdiction: US, entity_scope: the article's illustrative example company (Absolution Corporation), conditions: illustrative example with assumed amounts)_ `CG-MCE-081#S20` > “Absolution Corporation, which produces paraphernalia for churches, makes a monthly loan payment to its lender of $4,000, of which $1,000 is an interest payment and $3,000 is a principal payment. The company’s accountant records the following journal entry to record the transaction:” — [AccountingTools, Inc. (author Steven Bragg) — How to record a loan payment that includes interest and principal](https://www.accountingtools.com/articles/how-to-record-a-loan-payment-that-includes-interest-and-principal), 2026-07-03; Section "Example of a Loan Payment" (TEXT.txt line 86). Verified 2026-09-09. - In the article's example journal entry, the full $4,000 payment is recorded as a credit to Cash, which the article identifies as an asset account. _(jurisdiction: US, entity_scope: the article's illustrative example company (Absolution Corporation), conditions: illustrative example entry with assumed amounts)_ `CG-MCE-081#S21` > “Credit of $4,000 to Cash (an asset account)” — [AccountingTools, Inc. (author Steven Bragg) — How to record a loan payment that includes interest and principal](https://www.accountingtools.com/articles/how-to-record-a-loan-payment-that-includes-interest-and-principal), 2026-07-03; Section "Example of a Loan Payment", third line of the journal entry (TEXT.txt line 89). Verified 2026-09-09. - When repaying the loan, a check is created for each loan payment, each payment is recorded to the account created for the loan, and each interest payment is recorded to the user's expense account. _(jurisdiction: United States (en-US edition of the QuickBooks Online help article; amounts stated in US dollars and country selector set to United States), entity_scope: Businesses using QuickBooks Online, per the products the article lists itself as applying to, platform: QuickBooks Online, platform_edition: QuickBooks Online Advanced, QuickBooks Online Plus, QuickBooks Online Simple Start, QuickBooks Online Essentials, QuickBooks Ledger, Intuit Enterprise Suite; article updated 8/5/2026)_ `CG-MCE-081#S22` > “When you're ready to pay back the loan, create a check for each loan payment. Record each payment to the account you created for this loan. Record each interest payment to your expense account.” — [Intuit Inc. — Set up a loan in QuickBooks Online](https://quickbooks.intuit.com/learn-support/en-us/help-article/loans/set-loan-quickbooks-online/L7pMR6rUN_US_en_US), 2026-08-05; Section "Next steps". Verified 2026-09-09. _Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._ ## Which account each component is posted to - See above: In the article's example journal entry, the $3,000 principal portion of the payment is recorded as a debit to Loans Payable, which the article identifies as a liability account. ([CG-MCE-081#S02](#s-CG-MCE-081-S02)) - See above: In the article's example journal entry, the $1,000 interest portion of the payment is recorded as a debit to Interest Expense, which the article identifies as an expense account. ([CG-MCE-081#S03](#s-CG-MCE-081-S03)) - See above: In the article's illustrative example, a company makes a monthly loan payment of $4,000 made up of $1,000 interest and $3,000 principal, and its accountant records that payment as one journal entry; this is an example, not a requirement. ([CG-MCE-081#S20](#s-CG-MCE-081-S20)) - See above: In the article's example journal entry, the full $4,000 payment is recorded as a credit to Cash, which the article identifies as an asset account. ([CG-MCE-081#S21](#s-CG-MCE-081-S21)) - See above: When repaying the loan, a check is created for each loan payment, each payment is recorded to the account created for the loan, and each interest payment is recorded to the user's expense account. ([CG-MCE-081#S22](#s-CG-MCE-081-S22)) _Not established from an authoritative source._ _Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference, official platform documentation._ ## Escrow, taxes and fees bundled into the same payment - See above: The text notes that a lender might include other charges, fees, taxes or extras in the payments, and states that its own examples set those aside and deal only with interest and principal repayment. ([CG-MCE-081#S14](#s-CG-MCE-081-S14)) - Home mortgage payments are typically made monthly, and a lender may add further charges to them, such as real estate tax and homeowner's insurance; the text excludes such charges from its computation. _(jurisdiction: United States, entity_scope: home mortgages as discussed in the 20-year mortgage example, conditions: “typically” monthly, not invariably; the additional charges are given by way of example (“such as”) and are not an exhaustive list; excluded from the text's own computation)_ `CG-MCE-081#S15` > “Home mortgage payments are typically made monthly, and again, we will ignore additional charges by the lender, such as real estate tax and homeowner’s insurance.” — [OpenStax, Rice University — Principles of Finance — 8.3 Loan Amortization](https://openstax.org/books/principles-finance/pages/8-3-loan-amortization), 2026-04-23; Section 8.3 Loan Amortization — 20-year home mortgage example, paragraphs introducing Table 8.5. Verified 2026-09-09. _Not established from an authoritative source._ _Required authority: authoritative lender insurer or program documentation, authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._ ## Check your recorded loan balance against the lender's - See above: SBA states that a borrower can check loan balances and payment due dates by logging in to the SBA Loan Portal. ([CG-MCE-081#S17](#s-CG-MCE-081-S17)) - As a minimum check, a loan payment entry can be verified by periodically comparing the balance in the Loans Payable account with the remaining principal balance reported by the lender; the article offers this as something you can do, not as a requirement. _(jurisdiction: US, entity_scope: entities accounting for loan payments, conditions: hedged with "At a minimum" and "can"; depends on the lender reporting a remaining principal balance)_ `CG-MCE-081#S23` > “At a minimum, you can verify that a loan payment entry is correct by periodically comparing the balance in the Loans Payable account to the remaining principal balance reported by the lender.” — [AccountingTools, Inc. (author Steven Bragg) — How to record a loan payment that includes interest and principal](https://www.accountingtools.com/articles/how-to-record-a-loan-payment-that-includes-interest-and-principal), 2026-07-03; Section "Controls Over Loan Payment Accounting", paragraph following the controls list (TEXT.txt line 101). Verified 2026-09-09. _Not established from an authoritative source._ _Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._ ## How and how often the recorded obligation is verified - See above: SBA states that a borrower can check loan balances and payment due dates by logging in to the SBA Loan Portal. ([CG-MCE-081#S17](#s-CG-MCE-081-S17)) - See above: As a minimum check, a loan payment entry can be verified by periodically comparing the balance in the Loans Payable account with the remaining principal balance reported by the lender; the article offers this as something you can do, not as a requirement. ([CG-MCE-081#S23](#s-CG-MCE-081-S23)) _Partly established. Established: how a recorded debt obligation is verified against the lender's reported balance (S23). Missing: at what frequency that verification should occur; what a difference between the recorded obligation and the balance the lender reports indicates._ _Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._ ## Fixing a run of payments posted entirely to one account _Not established from an authoritative source._ ## Correcting periods that are already closed or reported _Not established from an authoritative source._ ## Interest incurred but not yet paid at your reporting date - The article defines accrued interest as the interest that has accumulated on a debt since the last interest payment date. _(jurisdiction: Not stated in the document; general accrual-basis accounting guidance from a US-based accounting publisher (site sections include State CPE Requirements and a GAAP Guidebook), entity_scope: a debt / interest on a debt, unrestricted by entity type in the text)_ `CG-MCE-081#S24` > “Accrued interest is the amount of interest that has accumulated on a debt since the last interest payment date.” — [AccountingTools, Inc. (author Steven Bragg) — Accrued interest definition](https://www.accountingtools.com/articles/accrued-interest), 2025-12-01; Section heading “What is Accrued Interest?”, opening paragraph (TEXT.txt line 84). Verified 2026-09-09. - The article states that, for the entity owing the payment, accrued interest is recorded as a debit to interest expense and a credit to accrued liabilities. _(jurisdiction: Not stated in the document; general accrual-basis accounting guidance from a US-based accounting publisher (site sections include State CPE Requirements and a GAAP Guidebook), entity_scope: the entity owing the interest payment, accounting_basis: accrual basis of accounting)_ `CG-MCE-081#S25` > “The amount of accrued interest for the entity owing the payment is a debit to the interest expense account and a credit to the accrued liabilities account.” — [AccountingTools, Inc. (author Steven Bragg) — Accrued interest definition](https://www.accountingtools.com/articles/accrued-interest), 2025-12-01; Section heading “How to Account for Accrued Interest”, bullet “Accounting by the paying entity” (TEXT.txt line 95). Verified 2026-09-09. - The article states that, for the paying entity, the debit is reported in the income statement and the credit in the balance sheet as a short-term liability. _(jurisdiction: Not stated in the document; general accrual-basis accounting guidance from a US-based accounting publisher (site sections include State CPE Requirements and a GAAP Guidebook), entity_scope: the entity owing the interest payment, accounting_basis: accrual basis of accounting, conditions: stated for the paying-entity bullet only)_ `CG-MCE-081#S26` > “The debit is rolled into the income statement and the credit into the balance sheet (as a short-term liability ).” — [AccountingTools, Inc. (author Steven Bragg) — Accrued interest definition](https://www.accountingtools.com/articles/accrued-interest), 2025-12-01; Section heading “How to Account for Accrued Interest”, bullet “Accounting by the paying entity” (TEXT.txt line 95). Verified 2026-09-09. - The article describes the accrual entries for both the recipient and the paying entity as being flagged as reversing entries, so that they are reversed at the beginning of the following month. _(jurisdiction: Not stated in the document; general accrual-basis accounting guidance from a US-based accounting publisher (site sections include State CPE Requirements and a GAAP Guidebook), entity_scope: both the payment recipient and the paying entity, accounting_basis: accrual basis of accounting, conditions: describes the two bullets that precede it in the article)_ `CG-MCE-081#S27` > “In both of the preceding cases, the transactions are flagged as reversing entries, so they are reversed at the beginning of the following month.” — [AccountingTools, Inc. (author Steven Bragg) — Accrued interest definition](https://www.accountingtools.com/articles/accrued-interest), 2025-12-01; Section heading “How to Account for Accrued Interest”, bullet “Use of reversing entries” (TEXT.txt line 96). Verified 2026-09-09. _Partly established. Established: the treatment when a finance cost has been incurred but not paid at a reporting date (S25, S31). Missing: when that adjustment is required._ _Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._ ## When that accrual is required, and how your accounting basis affects it - The article states that the accrued-interest concept is typically (not invariably) used to compile the unpaid interest receivable to or payable by a business at the end of an accounting period, so that the transaction is recorded in the correct period. _(jurisdiction: Not stated in the document; general accrual-basis accounting guidance from a US-based accounting publisher (site sections include State CPE Requirements and a GAAP Guidebook), entity_scope: a business, conditions: hedged as “typically used”, not stated as a universal requirement; applies at the end of an accounting period)_ `CG-MCE-081#S28` > “The concept is typically used to compile the amount of unpaid interest that is either receivable to or payable by a business at the end of an accounting period , so that the transaction is recorded in the correct period.” — [AccountingTools, Inc. (author Steven Bragg) — Accrued interest definition](https://www.accountingtools.com/articles/accrued-interest), 2025-12-01; Section heading “What is Accrued Interest?”, opening paragraph (TEXT.txt line 84). Verified 2026-09-09. - The article states that the accrued-interest approach just described is used only under the accrual basis of accounting. _(jurisdiction: Not stated in the document; general accrual-basis accounting guidance from a US-based accounting publisher (site sections include State CPE Requirements and a GAAP Guidebook), entity_scope: a business applying the accrual basis of accounting, accounting_basis: accrual basis of accounting, conditions: exclusivity as to basis of accounting is the source’s own word “only”)_ `CG-MCE-081#S29` > “This approach is only used under the accrual basis of accounting .” — [AccountingTools, Inc. (author Steven Bragg) — Accrued interest definition](https://www.accountingtools.com/articles/accrued-interest), 2025-12-01; Section heading “What is Accrued Interest?”, opening paragraph (TEXT.txt line 84). Verified 2026-09-09. - The article states that recording accrued interest is not useful or necessary where the amount to be accrued is immaterial to the financial statements. _(jurisdiction: Not stated in the document; general accrual-basis accounting guidance from a US-based accounting publisher (site sections include State CPE Requirements and a GAAP Guidebook), entity_scope: a business preparing financial statements, conditions: applies where the amount to be accrued is immaterial to the financial statements)_ `CG-MCE-081#S30` > “It is not useful or necessary to record accrued interest when the amount to be accrued is immaterial to the financial statements .” — [AccountingTools, Inc. (author Steven Bragg) — Accrued interest definition](https://www.accountingtools.com/articles/accrued-interest), 2025-12-01; Section heading “How to Account for Accrued Interest”, bullet “Accruals for immaterial amounts” (TEXT.txt line 97). Verified 2026-09-09. - In the article’s sample footnote disclosure, accrued interest is described as interest expense incurred but not yet paid as of the reporting date, included within current liabilities on the balance sheet. _(jurisdiction: Not stated in the document; general accrual-basis accounting guidance from a US-based accounting publisher (site sections include State CPE Requirements and a GAAP Guidebook), entity_scope: the illustrative company in the article’s sample disclosure, accounting_basis: accrual basis of accounting, conditions: text of a sample disclosure supplied as an illustration, not stated as a requirement; sample is dated as of December 31, 2025 and concerns long-term debt and credit facilities)_ `CG-MCE-081#S31` > “The accrued interest represents interest expense incurred but not yet paid as of the reporting date and is included within current liabilities on the balance sheet.” — [AccountingTools, Inc. (author Steven Bragg) — Accrued interest definition](https://www.accountingtools.com/articles/accrued-interest), 2025-12-01; Section heading “Disclosure of Accrued Interest”, sample disclosure “Note X – Accrued Interest” (TEXT.txt line 101). Verified 2026-09-09. _Partly established. Established: how the basis of accounting affects that requirement (S29). Missing: when a finance cost incurred but not yet paid at a reporting date must be recognised._ _Required authority: authoritative professional or accounting standard. Highest achieved: high quality professional secondary reference._ ## Not yet fully established from an authoritative source - Establish why a debt-service payment is allocated between reduction of the recorded obligation and a cost of the period, and what determines the proportion in any given period. _(not established; below the required authority class)_ - Establish what an amortisation schedule and a lender's periodic statement each provide for allocating a payment, and which governs when the two disagree, and how amounts bundled into the same payment that are neither a reduction of the obligation nor a finance cost are identified from those documents. _(not established; below the required authority class)_ - Establish what a borrower can obtain from a lender when no schedule or statement is available, and how the payment is recorded until the allocation is known. _(partly established)_ - Establish which accounts receive each component of a debt-service payment, including bundled amounts that are neither a reduction of the obligation nor a finance cost, and how the payment is recorded while the period's allocation is unavailable so that the components can be allocated once the lender supplies them. _(not established; below the required authority class)_ - Establish how a recorded debt obligation is verified against the lender's reported balance and at what frequency that verification should occur, and what a difference between the recorded obligation and the balance the lender reports indicates. _(partly established; below the required authority class)_ - Establish how a run of debt-service payments recorded entirely to a single component is corrected, including where the affected periods are already closed or reported. _(not established)_ - Establish when a finance cost incurred but not yet paid at a reporting date must be recognised, and how the basis of accounting affects that requirement. _(partly established; below the required authority class)_ - Establish why the payment must be divided and what each component does: one reduces an obligation already on the balance sheet, the other is a cost of the period. _(partly established; below the required authority class)_ - Establish the sources of the period's allocation, stating what an amortisation schedule provides and what a lender's periodic statement provides, and which governs when they disagree. _(not established; below the required authority class)_ - Establish what to do when neither a schedule nor a statement is available, including what can be obtained from the lender and how the payment is recorded until the allocation is known. _(partly established; below the required authority class)_ - Establish that the proportion between the components changes every period, and explain why a recurring entry with a fixed split drifts from the true obligation. _(partly established; below the required authority class)_ - Show how the payment is recorded as a single transaction with multiple components, naming the accounts each component is posted to. _(established; below the required authority class)_ - Establish how amounts bundled into the same payment that are neither principal nor a finance cost are identified and recorded. _(not established; below the required authority class)_ - Require periodic verification of the recorded obligation against the lender's reported balance and establish what a difference indicates. _(not established; below the required authority class)_ - Establish how to correct a run of payments recorded entirely to one component, including where the affected periods are already closed or reported. _(not established)_ - Establish the treatment when a finance cost has been incurred but not paid at a reporting date, and identify when that adjustment is required. _(partly established; below the required authority class)_ ## Related - [I bought equipment (or a truck) with a loan and a down payment — how do I record the purchase so the books show both the asset and what I still owe?](https://uppago.com/resources/i-bought-equipment-or-a-truck-with-a-loan-and-a-down-payment-how-do-i-record-the) - [The loan money landed in my business bank account — how do I record it so it isn't treated as income?](https://uppago.com/resources/the-loan-money-landed-in-my-business-bank-account-how-do-i-record-it-so-it-isn-t) _Reference date 2026-09-07. Statements are quoted verbatim from their sources; scope and verification dates are shown on each._