Treatment of long term loan in balance sheet

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sombir sangwan (Querist)
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14 May 2014 How we can bifurcate the amount of long term loan in balance sheet. Suppose i have a long term loan of Rs 500000/- and my EMI is Rs.20000/-. Interest rate is 10%. What amount should i shown as Short term loan and long term loan in Balance Sheet.

Sandeep Dharar

Sandeep Dharar (Expert)
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14 May 2014 Just show it under Long term Loans under Liability side Rs. 5L. And when u pay the EMI the loan amount will get reduced automatically. And when whole EMI is done then the balance will become NIL. Show the EMI payment in P&L A/c.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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14 May 2014 no. the amounts payable in next 12 months need to be shown as current liabilities. so calculate the principal payable in next one year and classify it as current liability.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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14 May 2014 no. the amounts payable in next 12 months need to be shown as current liabilities. so calculate the principal payable in next one year and classify it as current liability.

sombir sangwan

sombir sangwan (Querist)
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15 May 2014 Thanks Nikhil Kaushik and Sandeep Dharar.
I was doubted about will it be Principal amount or EMI amount that shown as current liability.Now its Clear.

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