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