JJH1969 wrote: »
Can a director make a loan to a third party from company funds? If so what notes are needed in the accounts?
missmel wrote: »
A Maintenance company I do books for loaned a large sum of money to a friend who is a builder, he had a contract drawn up by a solicitors saying the money was due to be repaid in full in 30 days, so I treated it as a loan in the balance sheet. DR Loan CR Bank
Then some 6 months later half the money was re-paid, DR Bank CR Loan
But then the owner told me to write off the balance as he wasn't going to get the money............
I have treated this as DR Bad Debts (P&L) and CR Loan - so loan is at zero now
But I would also like to know from the tax guru's on here :001_smile: what is the best treatment of this in the year end accounts? and have I treated it correctly as a bad debt when it was a loan?