Hi,
it's difficult to understand why you are making the entry
The director's loan account is negative and it's a liability account. SO that means that the company has a negative liability? I.E. the director OWES the company Money In effect the negative balance is an asset.
Is the entry being made because money is owed to the director? Or is the entry because the director owes the £k. Why is the entry necessary, shouldn't this have been posted each month / week?
So if the director is owed the money then it needs to be an increase in liability (a decrease in the negative balance), If the money was paid to the director then it's a decrease in liability (an increase in the negative balance)
Hope that helps?
Kindest regards
RoscoPC
