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