Track loans, produce amortization schedules, split principal and interest
The Long-term debt worksheet builds each loan's amortization schedule from its parameters (amount, rate, payment, frequency), automatically splits the long-term and current-portion, isolates interest paid, and prepares the adjusting entry. It also handles merchant cash advances (MCA/Vault), early payoffs, moratoriums, and interest exemptions.
The worksheet at a glance
Three tabs :
- Summary : one row per loan, with opening balance, additions, principal repayments, closing balance, long-term/current portion, interest paid, and a preview of the next 5 years' repayments. The gap between the schedule's projection and the TB balance is highlighted.
- Schedule : the full amortization table for the selected loan, payment by payment.
- Adjusting entry : principal repaid + interest paid (+ accrued interest if enabled), in three steps like other worksheets.
At the top : Export Excel (one .xlsx tab per loan with its full schedule) and Print (PDF for reviewer).
Enable the worksheet and click New loan
Enable from Worksheets (Ledger suggests it when a long-term debt account is non-zero). Then, tab Summary, click New loan.
Fill in the loan parameters
The « New long-term loan » dialog asks for :
- TB account : the balance-sheet loan account.
- Description, Lender, Loan type : text.
- Loan date : the disbursement date. First payment lands one period later (loan on Dec 2 → first payment Jan 2).
- Original amount, Residual value, Annual interest rate (%).
- Total payments, Payments per year, Periodic payment.
Fill in three of the four (amount, rate, number of payments, periodic payment), Ledger computes the fourth. The message « ✓ Calculated from the other fields » appears under the found value. If it can't converge, Ledger says so.
Edge cases : moratorium, exemption, early payoff
- Interest exemption from... to... : period with no interest accrual (promo offer, deferment).
- Principal moratorium from... to... : period where only interest is paid, principal frozen.
- Demand loan : check if the loan can be called anytime. A renewal date replaces the maturity date.
- Early payoff date (buyout) : only if the loan was refinanced or bought out before term. The schedule stops at that date, interest stops after, and Ledger shows « Payoff balance at this date : $X » under the field.
Enable accrued interest if needed
Checkbox Compute accrued interest at year end. Ledger then computes interest from the last payment to year-end and adds it to the adjusting entry (DR Interest / CR Accrued liabilities).
Two TB accounts to pick : Accrued liabilities account and Interest expense account. Leave the latter empty for auto-detection (group 808).
Read the Summary and spot gaps
Each row shows opening/additions/principal repayments/closing, then TB balance and gap. A green checkmark means the schedule's projection matches the TB (net of adjusting entries). A yellow amount means there's a gap : the tooltip proposes two hypotheses, an unplanned extra payment or a wrong original amount/date.
Next years button at the bottom : opens 5 upcoming years (principal, interest, payments) and a link to « following years » for the FS note.
Consult and verify the schedule
Tab Schedule, pick the loan. Ledger shows the amortization table payment by payment : N°, Date, Opening balance, Payment, Principal, Interest, Cumulative interest, Ending balance. Plus a loan summary : periodic payment, periodic rate, total interest, total paid.
Use Export Excel at the top for a .xlsx file with one tab per loan.
Submit the adjusting entry
Tab Adjusting entry, three steps :
- Entries already posted. Ledger lists adjusting entries that already touch the loan accounts. Check to have them reversed.
- Entries that should have been posted. Computed from the schedule : principal repaid + interest paid during the year (+ accrued interest if enabled).
- Adjusting entry to submit. Difference between step 2 and step 1. Button Submit the adjusting entry.
Special case : merchant cash advances (MCA/Vault)
MCAs aren't traditional loans : no stated nominal rate, repayment tied to sales percentage or fixed installments. Model them like this :
- Original amount : the net received by the client (not the notional). If Vault advances $50,000 and takes $500 in origination fees, enter $49,500.
- Residual value : 0.
- Total payments and Periodic payment : per Vault's agreement.
- Annual interest rate : leave empty, Ledger's Solve button computes the implicit rate (often high, 30–60 %).
- If the client buys out early, set the Early payoff date : Ledger shows the payoff balance at that date.
Frequently asked questions
Can I link several loans to the same TB account ?
Yes. The summary shows one row per loan, and the account's gap vs the TB compares the sum of computed balances against the TB.
A loan changes rate mid-life, how to handle ?
Represent as two loans : the first with an early payoff date at the refinance date, the second with a loan date = same date and the new rate. The first's payoff balance becomes the second's original amount.
The adjusting entry was submitted, I want to change it
Don't delete. Change the loan parameters or the selection of entries to reverse, then click Submit again. Ledger offers Replace to update the existing JE without changing its number.
Attach a document (loan agreement) to the loan ?
Open the loan in edit mode, a Documents attached to this loan panel appears at the bottom. Drag and drop or click to upload. Documents stay with the loan and follow it year over year.