Here are the detailed instructions for recording funds received from the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) in QuickBooks:

 

A. Create a new account.

  1. Click Lists on the top menu bar
  2. Click Chart of Accounts
  3. Click the Account dropdown (or right click in the list)
  4. Click New
  5. Click Other Account Types, choose Long Term Liability from the dropdown list
  6. Click Continue
  7. Enter “SBA PPP Loan” in the Account Name field, complete any additional information that you track, account number, description, etc.
  8. Click Save and Close

B. Create another new account.

  1. Click Lists on the top menu bar
  2. Click Chart of Accounts
  3. Click the Account dropdown (or right click in the list)
  4. Click New
  5. Click Other Account Types, choose Other Income from the dropdown list
  6. Click Continue
  7. Enter “Forgiven PPP Loan” in the Account Name field, complete any additional information that you track, account number, description, etc.
  8. Click Save and Close

C. Deposit the funds received.

  1. Click Banking on the top menu bar
  2. Click Make Deposits
  3. If there are any “Payments to Deposit” click Cancel
  4. Click the dropdown in Deposit To and choose the bank account the funds were deposited in, Tab
  5. Change the date to the date the funds were deposited, Tab to From Account
  6. In the From Account column, enter SBA PPP Loan, Tab to Amount
  7. In the Amount column, enter the amount of funds received
  8. Click Save & Close

D. Maintain proper documentation to substantiate costs.

  1. The CARES Act expressly requires that you, the borrower, be able to adequately document the use of PPP funds in order to obtain forgiveness.
  2. At the end of the eight-week period you will need to file an application with the bank requesting forgiveness.

E. If the bank forgives the loan, or a portion of the loan, prepare a general journal entry.

  1. Click Company on the top menu bar
  2. Click Make General Journal Entries
  3. Enter the date the loan was forgiven, Tab to Account column
  4. In the Account column, enter SBA PPP Loan, Tab to Debit column
  5. In the Debit column, enter the amount of loan forgiven, Tab to the next line
  6. In the Account column, enter Forgiven PPP Loan, Tab to Credit column
  7. In the Credit column, enter the amount forgiven, Tab
  8. Click Save & Close

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Debbie Denny
I joined Hawkins Ash CPAs in 2008. I am an Accounting Services Manager, Advanced Certified QuickBooks Desktop ProAdvisor and Certified QuickBooks Online ProAdvisor. I have been certified in QuickBooks for more than 20 years and specialize in software consulting and training, small business accounting and tax preparation. I also am experienced in Sage 50 software.

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