Directors loan paid off in full

Pdiddy · ‎April 01, 2022

Hi I have recently paid back a directors loan in full so need to show that it has been repaid but can’t seem to find how to do that I assume I have to set up an entry to show the loan in the first place and then show that it has been paid back can anyone advise ?

many thanks

paul72 · ‎April 01, 2022

Hi @Pdiddy

I'm not 100% sure if this is a loan to a director from the company or a loan from a director to the company.

Either way, the process is similar.

Set up the loan account (either as an asset or a liability depending on which way the loan is going).

Entry to show the loan - either a cheque or a deposit posting from the bank account to the loan account.

Entry to repay the loan is the reverse - either a deposit or a cheque to the bank account from the loan account.

Hope this helps.

View solution in original post

GeorgiaC · ‎April 01, 2022

Hi Pdiddy, thanks for joining us here on the Community - do you know which Chart of Account the loan was recorded as deposited into?

paul72 · ‎April 01, 2022

Hi @Pdiddy

I'm not 100% sure if this is a loan to a director from the company or a loan from a director to the company.

Either way, the process is similar.

Set up the loan account (either as an asset or a liability depending on which way the loan is going).

Entry to show the loan - either a cheque or a deposit posting from the bank account to the loan account.

Entry to repay the loan is the reverse - either a deposit or a cheque to the bank account from the loan account.

Hope this helps.

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Directors loan paid off in full