Introducing loan into business

[philip41]

Hi Last month we had a 10k bank loan, the money was paid directly into the companies main bank account.

My question now is, how do we account for this within our accounts package please, we use Xero.

thanks

 

[Nick Kay]

Hi Philip,

You may need to create a new account code for the loan first.

Then you can code it to this account from the bank reconciliation screen.

More than happy to take you through on line if you like. May be easier than writing full instructions on here.

Thanks,

Nick.

 

[Energise Accounting]

you need to create a loan a/c in the balance sheet, you will also need to create a loan intrest a/c in the p&l then at the end of each month create a journal to account for the payments here is a e.g.


The initial loan £10,000


DR Bank £10,000

CR loan a/c £10,000


Now let us say you pay back £300 a month of which £50 is interest the journal would be

DR loan a/c £250.00 balance sheet

DR loan Interest £50.00 profit and loss

CR bank £ 300.00

 

[David Griffiths]

Or to put it in layman's language

Create a new account (if needed) in the Chart of Accounts as a Long Term Liabilty account

Create a receive money transaction when reconciling the bank and code it to the loan account

 

[MyAccountantOnline]

Hi Last month we had a 10k bank loan, the money was paid directly into the companies main bank account.

My question now is, how do we account for this within our accounts package please, we use Xero.

thanks

Presumably this was a loan advanced to the company, rather than a loan taken by you as a director and paid into the company bank account.

 

[philip41]

Presumably this was a loan advanced to the company, rather than a loan taken by you as a director and paid into the company bank account.

Correct paid to the company.