How to enter loan entries

DebA

Hi

I need to enter a loan entry between two company entities within an organization. However, it will only be a book entry at this point, not an actual debit/expense from a bank account to another entity.

I think I need to do a credit entry - account called ' loan to ABC' (in first entity) - under 'other current asset' is this right?

Trying to figure what to debit? Would it be another loan account 'loan from XYZ (in the 2nd entity)- under other current liability? is this right?

thanks for any help.

Debbie

Zappy

This is accounting. Probably check with your tax agent. Or BAS agent. You know what we say about free advice. Its worth exactly what you pay for it.

Acctd4

Hi Debbie

Yes, you're correct - In the lender company file, use an Other Asset account, in the borrowing entity company file, use a Liability account. Personally I use the Write Cheque/Deposit forms to record these transactions as they're easier to identify & allow for more detail. If not already existing, I set up the other entity as an "Other Name" & use that name on them.

IMPORTANT: Do NOT use any tax codes as these are not income/expense transactions! Make sure you leave the tax code column BLANK in both file entries 😊