Bank Loan Treatment

bigmuggsy

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

Monsoon

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.