Bank Loan Treatment

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bigmuggsy
bigmuggsy Registered Posts: 92 Regular contributor ⭐
in General accounting discussion
Hi

Having one of those 'moments' - can anyone just confirm the double entry for a new bank loan taken out, loan amount £6500, drawdown was £7294.53. First year 2 repayments, first was £202.83, second £202.62.

If anyone could just confirm the double entry into the accounts be appreciated.

Thanks

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  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    No worries:

    DR Bank, CR Long term loan £6500

    DR Deferred Loan interest £794.54 CR Long term loan (assuming that's what the difference is and not payment protection insurance etc)

    Then the payments are DR Long term loan CR bank.

    You DR Loan interest (P&L) and CR deferred interest over the right period of time.

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