Cash loans adjustment debtor and creditor balance

it assess outstanding ledger balance amount show in books in f.y.20-21 one debtor and one creditor .
1.cash loan from creditor rs:1 lacs
2.cash loan to debtor rs:1 lacs
question:
assess cash loan from creditor rs: 1 lacs ledger balance amount transferred to cash loan to debtor account adjustment entry passed in books allowed in it act.