Loan from lic
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
15 December 2011
My boss had taken a loan from one of his LIC policy for doing business. Now that policy is matured. LIC has deducted there loan amount along with interest and balance has been paid back.
I want to know what is the book entry to be made in his books of accounts.
I want to know what is the book entry to be made in his books of accounts.
15 December 2011
LETS TAKE AN EXAMPLE
LET US CONSIDER THE MATURITY AMOUNT OF YOUR BOSS POLICY BE 100000/- FROM WHICH HE AVAILED 50000/- AS LOAN NOW ON MATURITY DATE SUPPOSE INTEREST ON LOAN AMOUNTS TO 10000/- THE JOURNAL ENTRY WOULD BE-
LOAN A/C DR. 50000
INTEREST ON LOAN A/C DR. 10000
BANK A/C DR. 40000
TO BOSS CAPITAL A/C 100000
( LOAN A/C HAS BEEN DEBITED BECOZ NO LOAN A/C NOW EXISTS, INTEREST IS AN EXPENSE FOR HIM AND BALANCE AMT IS RECEIVED ON MATURITY ON HIS BANK A/C)
LET US CONSIDER THE MATURITY AMOUNT OF YOUR BOSS POLICY BE 100000/- FROM WHICH HE AVAILED 50000/- AS LOAN NOW ON MATURITY DATE SUPPOSE INTEREST ON LOAN AMOUNTS TO 10000/- THE JOURNAL ENTRY WOULD BE-
LOAN A/C DR. 50000
INTEREST ON LOAN A/C DR. 10000
BANK A/C DR. 40000
TO BOSS CAPITAL A/C 100000
( LOAN A/C HAS BEEN DEBITED BECOZ NO LOAN A/C NOW EXISTS, INTEREST IS AN EXPENSE FOR HIM AND BALANCE AMT IS RECEIVED ON MATURITY ON HIS BANK A/C)
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