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Bank loan entry

28 September 2020

Loan borrowed for 500000 from icici entire amount has been paid and one installment has been paid late for Rs.500 charged by bank for this which account should I debit is it icici bank or some other account if I debit icici bank then it shows debit balance?

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2 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 28 September 2020

your 1st entry for borrowed loan is

1) Bank A/c Dr 500000/-

Loan form ICICI Bank A/c Cr 500000/-

( Loan from ICICI Bank )

Loan A/c will be under secured loan Liability side of balance sheet

2) When you repay the same amount with Bank charges

Loan from ICICI bank A/c Dr 500000/-

Bank Charges A/c Dr 500/-

To Bank A/c Cr 500500/-

( Repayment of loan along with bank charges )

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Kutub Hamid (118 Points)
Replied 12 October 2020

If want to reflect this charges in Loan A/c
Then Pass a JV first
Bank/Loan charges A/c Dr. ₹500
To ICICi Loan A/c Rs. 5000

so, now u may have this rs. 500 outstanding bal. in loan A/c
To nullify the same,
U may have paid Rs. 500 in cash or thru other bank A/c so, just pass this entry

Icici laon A/c Dr. rs. 500
To Cash/ bank rs. 500

Doneee.... (if done this way u can see the extra charges by IcICi bank loan A/c, and also expense is booked)

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