Term loan

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How to treat Term Loan in Balance Sheet, i mean whole sanction amount show in Liability side or EMI in asset side.
Replies (5)

whatever loan u get show in liability side 

 

emi is installment which includs some part of interest and some part of loan

which is to be repaid 

interest is comes under indirect expense and paid of loan amount through

emi whch is already comes under liabilty side under heading loan

 

We have Rs 10 lakh term loan in FY 2015-16 EMI 29000 in FY 2015-16 we repaid 4 EMI (29000*4) now i want to know how i post in balance sheet please let me know. 

entry for receive lone 
 

bank a/c  -  1000000/-

     To unsecured \secured loan- 1000000/-   (liability side )

(being loan received from bank ) -     

 

entry for payment of loan

loan a/c   29000/-   

        to bank - 29000/-

being loan installment paid 

 

 

Originally posted by : Girish Suryawanshi
We have Rs 10 lakh term loan in FY 2015-16 EMI 29000 in FY 2015-16 we repaid 4 EMI (29000*4) now i want to know how i post in balance sheet please let me know. 

Hi,

Loan outstanding to be shown as liability, interest part of EMi to be booked as expense in P & L.

Interest on Loan Dr. (Interest amount)

Loan Account Dr. (Principal part)

                    To Bank Account                            Rs. 29000

 

Thank You.


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