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Loans principal payment query in balance sheet

495 views 2 replies

Ataur Rehman

193 Points Posted on 17 December 2024

Sir, I have a doubt. My doubt is, when we make a principal repayment on a loans, do we need to reduce that in the drawings in the balance sheet? When we repay the principal, will it be considered under drawings in the balance sheet? Thank you

Replies (2)

Rama chary Rachakonda

Master in Accounts & high court Advocate

9615 Points Posted on 17 December 2024

When u repay the amount of the principal of loan, do not reduce the drawings amount in the balance sheet.

N Chauhan

3 Points Posted on 18 December 2024

If you make a repayment of the principal loan then you might have paid through cash or bank

so the entry will be

loan A/c Dr.
To Bank A/c

so the drawing is not adjusted as it forms part of capital A/c

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