How Do You Record Monthly Loan Interest

by Kelly
(Logan Qld Australia)

Our business began with the loan:
Dr Bank
Cr Loan Account

For making payments I have just:
Dr Loan account
Cr Bank

Now I have received monthly interest. Do I:
Cr Loan Account
Dr Loan Expense Account(start up this account)

???
Would this be right?
We are running on cash basis accounting with ATO.

Lending

by Jan
(Myrtle Beach)

I want to lend my company money from my personal account-how do i reflect that transaction on my business books?

Hello Jan,

Thank you for your inquiry.

Money you lend to your company from your personal account would be recorded as a shareholder loan liability account on the balance sheet. This would be done as follows:

DEBIT Bank Account
CREDIT Shareholder Loan Account

LOAN

HOW DO I LOAN MY BUSINESS MY PERSONAL MONEY?

Loan Interest

I study a Level III bookkeeping.
In may assignment I have trial Balance as at 31 march 2008. The loan Interest - £500. Loan - £10 000. The Rate of Interest on the loan is 10% per annum. I need to correct Trial Balance.
If Loan Interest will be debeted another £500, which account I should credited?

Many Thanks
Margarita

Loan or Invest ?

I do business (partnership) with a guy. Can I write a note to loan money to business instead of invest into business as a partner?

Hi,

Thanks for the inquiry.

As long as you and your partner have agreed that the business will repay money invested, I believe it is fine to write a note to loan money to the business instead of investing into the business as a partner.

Loan to Someone

by Elisabeth
(Perth)

Hi, If the business (a trust) lends money to one of its owners (who are on a salary) or an employee, (not an advance, but to be paid off) I am just not sure what sort of account to create for it? i use myob. Thank you

Recording a loan that the money did not go into the bank

I am trying to record a loan in the books from a business development center. The issue is, the funds did not go into the bank account, it went to a house mortgage so I record the interest and payments to a loan account and it shows (of course) a negative balance. How do I record the loan on the credit side, since it did not go into the bank. Hope this makes sense. thanks Pam

Recording Settlement Loan

If there is a payment schedule to settle a lawsuit, I credit the liability for the total settlement, but what account do I debit?