15 December 2011
My boss had taken a loan from one of his LIC policy for doing business. Now that policy is matured. LIC has deducted there loan amount along with interest and balance has been paid back. I want to know what is the book entry to be made in his books of accounts.
15 December 2011
LETS TAKE AN EXAMPLE LET US CONSIDER THE MATURITY AMOUNT OF YOUR BOSS POLICY BE 100000/- FROM WHICH HE AVAILED 50000/- AS LOAN NOW ON MATURITY DATE SUPPOSE INTEREST ON LOAN AMOUNTS TO 10000/- THE JOURNAL ENTRY WOULD BE- LOAN A/C DR. 50000 INTEREST ON LOAN A/C DR. 10000 BANK A/C DR. 40000 TO BOSS CAPITAL A/C 100000 ( LOAN A/C HAS BEEN DEBITED BECOZ NO LOAN A/C NOW EXISTS, INTEREST IS AN EXPENSE FOR HIM AND BALANCE AMT IS RECEIVED ON MATURITY ON HIS BANK A/C)
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