Let A is an employee getting 30,000 pm as Gross Salary. Other deductions are PF 1000, PT 200, TDS 1500 out of the gross salary. Now the employee wants a loan from company for Rs. 60,000 which ll be recovered from him in 12 installments as 5,000x12=Rs. 60,000. Let say for that loan interest is flat 500 per month for the 12 installments. Then please tell me how should be the entries made so that the principal payment and interest on it can be reflected.
27 June 2009
In your books of account, debit loan a/c by Rs.60000/- and when it will be recovered then credit loan a/c with princial amount and credit interest a/c with interest amount. Pls note that if interest will be charged less 13% then difference amount of interest will be included in employees income
27 June 2009
1. On Release of Loan: Loan A/c - Debit 60000 To Bank 60000 2. To Charge Interest on Loan: Loan A/c - Debit 500 To Interest on Loan 500 3. To Transfer Interest to P & L A/c: Interest on Loan - Debit 500 To P & L A/c 500 4. On Receipt on Monthly Instalment with Interest: Bank A/c - Debit 5500 To Loan A/c 5500
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