Regarding journal enteries

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

18 June 2016 A Proprietorship firm take a loan from bank. for bank loan bank open new account & credit loan amount in new a/c. now the question arises what is the entry for that transaction ???????????
bank A/c Dr.
To _________________
what is the entry in case of loan repayment ??????????

Amol S Joglekar

Amol S Joglekar (Expert)
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18 June 2016 for loan credited in new account
debit bank account
credit Loan account

for interest
debit interest on loan
credit Loan account

for repayment
debit Loan account
credit bank/cash as the case may be

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Kaushik Joshi

Kaushik Joshi (Expert)
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18 June 2016 yes I agree with Amol Sir. here bank account is asset, loan account is current liability or term loan as case may be, and interest on loan is expense.

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