01 March 2019
One of my client had availed loan of Rs. 20 lacs in 2015 and later on defaulted in last 12 payments amounting to Rs. 5 lacs appx. After discussion with lenders both agreed to settle the same for Rs. 4.50 lacs. The company paid Rs. 4.50 lacs and settled the a/c in books of lenders and also received the NOC. Now balance Rs. 0.50 is outstanding in loan account but it is not to be repaid. Please guide as to what should be it's accounting treatment. Which entry should be passed in books of company to close the loan account.
04 March 2019
The account on the credit you hit will be an “Other Income” account. the amount that need not to be repaid will have to be shown as your indirect income.
25 March 2019
Just wanted to know, since the principal has not to be repaid so should it be shown as income in P/L Account or transferred to Capital Reserve Account as this I don't think would be considered as income to be shown in P/L A/c.
CAclubindia
