amortaHow the numbers are worked out
The calculator uses the same code that Amorta uses to post loan entries to QuickBooks Online, so the schedule here matches the app to the cent. Every amount is rounded to cents per payment, the way lenders apply it, and the final payment absorbs any rounding.
The payment
A level payment that pays the loan off over the amortization period:
payment = balance × r ÷ (1 − (1 + r)−n)
where r is the rate per period (annual rate ÷ 12 for monthly payments) and n is the number of payments. If the note states a payment, enter it under More options and the schedule follows the note instead.
Interest for each payment
Interest is charged on the balance for the days in the period, by the note's day-count convention. With 30/360 every month has 30 days, so monthly interest is the same each month. With actual/360 or actual/365 a 31-day month costs more than a 30-day one; actual/360 is common on commercial loans and comes out slightly higher than actual/365. Principal is the payment minus the interest.
Current and long-term portion
The current portion is the principal scheduled to be paid in the 12 months after the balance sheet date (ASC 470-10-45). It's the sum of the principal part of each payment due in that window, not the next 12 payments × the payment amount, which would include interest. The rest of the balance is long-term. On a balloon loan the balloon moves into current once it falls within 12 months.
Accrued interest
Interest from the last payment date to month-end, on the balance after that payment. If the payment falls on the 15th, roughly half a month of interest is owed at month-end. Book it as interest expense and accrued interest payable, then reverse it on the 1st, so the next payment's interest isn't counted twice.
The entries
- Book the loan: debit cash (or the asset bought), credit notes payable.
- Each payment: debit notes payable for the principal, debit interest expense for the interest, credit cash for the payment.
- Month-end: accrue interest to the end of the month, and move principal between long-term and current so the current portion equals the next 12 months' principal.
Questions
Does QuickBooks Online have a loan amortization schedule?
No. QuickBooks Desktop had Loan Manager, but QuickBooks Online has no built-in amortization schedule. Intuit's help article says amortization has to be done with manual transactions such as checks and journal entries. That's the gap Amorta fills: it keeps the schedule for each client loan and posts the entries for you.
Why doesn't my lender's statement match the schedule?
The usual reasons: a different day-count convention, a payment that arrived early or late (actual-day loans charge interest to the day it was received), an extra principal payment, or interest for the days before the first period. Check the note's day count first. In Amorta you can enter what the lender actually applied and the rest of the schedule follows from it.
How do I handle a balloon loan?
Enter the term (for example 5 years) and, under More options, the longer amortization (for example 20 years). The payment is calculated over 20 years and the balance left after 5 years is the balloon, shown in the last row and in the current portion once it's within 12 months.
Is my data saved?
No. The calculator runs in your browser and sends nothing anywhere. The link in your address bar holds the terms, so you can bookmark it or send it to a colleague.