stevebramich
Level 1

How do I enter loan fees which are added to a loan amount but not deposited?

 
Rustler
Level 15

Banking

Let's say you borrow 1,000, and the fee is 25

 

 use make deposits

line one, liability account, 1,025

line two, fee expense, -25

 

or

journal entry

fee expense, 25 (debit)

bank deposit, 1,000 (debit)

loan current liability account 1,025 (credit)

stevebramich
Level 1

Banking

Thanks Rustler,

 

Could you tell me how to enter the fee expense as an expense for tax purposes without it affecting bank account balances? I tried to enter it as an expense to an undeposited funds account which I created as a Current Asset account but got an error message when I tried to save it.

Rustler
Level 15

Banking

My entries posted it to an expense account

sorry I can not help with your VAT tax system, I am in Texas