AA-29 Accounting Treatment for Loan Write Off.

1) Either credited to him against adjusted in any expenses or

2) Make Cash receipts of that same value & credited to him.

Though Employer wants to give benefit to the employee against loan , so one should have to write off all his debit balances , we have only 2 choices either make any journal entries & debit to the any expenses like office expenses,factory exp., salary, bonus, or ex gratia kind of or credited him by showing cash receipts or kind of because all n all this is just a book entries .

When company gave loan to employee

Dr. Loan and advances or employee or receivables

Cr. Bank/cash.

When writing off that loan

Dr. Loan write off - income statement

Cr. Loans and advances, employee or receivables