How do you record a loan in accounting?

The double entry to be recorded by the company is: 1) a debit to the company's current asset account Cash (or Checking Account) for the amount that the bank deposited into the company's checking account, and 2) a credit to the company's current liability account Notes Payable (or Loans Payable) for the amount of ... read more

Record the loan payment. Unamortized loans are repaid at once in the amount of the loan principal at maturity. To record the loan payment, a business debits the loan account to remove the loan liability from the books, and credits the cash account for the payment. read more

Record the loan in the general ledger. You will debit cash for the amount of the loan and credit short-term notes payable for the amount of the loan that will be paid during the year and long-term notes payable for the portion that is not due to be paid during the year. read more

How to Record the Loan Principal and Its Interest. Each month when the payment is made to the bank, the entry will be posted as follows: [Debit]. Loan Payable – Bank = $250.00 [Credit]. Interest Expense = $100.00 [Credit]. Checking Account = $350.00 To record loan payment: “Checking Account” is credited as cash is going out of the account. read more