Urgent

  • X co intend to make payment to party but there is no sufficient fund to make payment, so the proprietor of that concern make payment in his hand , later company refund it to him
  1. what is  the accouting entry for this make payment
  2. what is  the accouting entry for refund it to proprietor
  • co. X make loan to co Y
  1. Loan to y   Dr 

                To Bank 

is it a correct treatement and Loan to Y   is grouped under which head

      2. what is the accounting treatement of settlement of loan

Replies (1)

The Proprietor can bring in funds as short term loan with or without interest bearing out of which you can make the payment.
There are Loans and Advances Account in both Asset and Liability, when you give a loan it will effect the asset and when you take a loan it will effect the liability.

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