Entry for taken housing loan

Dear Samir,

The following entry is to be passed at the time of taking Loan

1. Bank account ........ Dr

        To Bank loan a/c

( Even though you will give cheque in Builder Name)

( While giving Cheque< Builder A/c......Dr and Bank Cr )

i think its correct............................................... from janardhan

we need to write two entries for that

1.  for purchase of house

Asset A/c.. Dr

Builder A/c

2.  for payment made by bank means loan

Builder a/c.. dr

Bank Loan a/c

For Purchase of House, entry would be :

Building account ..................Dr

    To Builder's Account.

For taking loan from bank and issuing the same cheque to builder, entry would be :

Builder's Account ...................Dr

    To Bank Loan Account.

When EMI is paid then entry would be 

Bank Loan account .............. Dr   (To the extent the amount pertains to the installment)

Interest Account ......................Dr 

     To Respective Bank Account.

I hope my answer would be usefull.

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