How to enter loan entries

DebA
DebA Member Posts: 30 ✭

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

Comments

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,315 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert

    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 😊

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner (AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

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