Hi Actually the directors loan account is having a debit balance. I want to know how the company should deal with this and what are the consequences of writting off of this balance. Can it could be settled by declaring dividend.
Please give me the accounting entries to be passed by the company.
Just calculate the interest and if the debit balance is less than the interest than treat the balance as interest. or else see if any remuneration or incentive payable to directors and trf. the debit balance to such accounts.