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N
Nieves 12
October 18, 2021
Question

Loan from company to shareholder

  • October 18, 2021
  • 2 replies
  • 0 views

Hello, I hope you can help me to record a loan given from a company to one of its shareholder. Basically the company has given a a 1 year loan without interest to one of the shareholder. How should I record this money transfer from the bank account to the shareholder's personal bank account? Thanks 

2 replies

PrachiJoshi
PrachiJoshi
October 18, 2021

You will create an asset account: Loan to shareholder

 

Then create a journal entry:

 

DR Loan to shareholder 100

 CR Bank 100

N
Nieves 12Author
October 18, 2021

Thanks Prachi,

 

So basically, I will create a other current asset account, right? Can I create also a sub-account which the name of the shareholder to identify the shareholder who owes the money to the company? 

PrachiJoshi
PrachiJoshi
October 18, 2021

I do not like sub-accounts that much unless it is really needed :)

 

You can just create an asset account with a name like this: Loan to Nieves

T
Trish_T
October 19, 2021

Hi Nieves,

 

It's great to see you in Community!  When it comes to recording a transfer of funds from your bank account for the purpose of an interest-free loan to a shareholder, I'd encourage you to reach out to an Accountant.  They can provide you with the best course of action for these types of transactions to ensure they're applied correctly

 

If you don't have an Accountant, we can help you find one here.  Enter your postal code to find an Accountant in your area.

 

Please feel free to reach back out if you have any other questions or concerns.  We'd be happy to assist!

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