Loan Repayment into another Company

Renevp 4 · ‎October 21, 2022

Hi,

I require some assistance with a client's Loan repayments please.

The client has 2 companies A and B:

- A short-term Loan was made to an employee from company A

- Employee paid the loan back to the Company, But into Company B

I work on both companies' books, but in one company I have a loan Credit and in the other a Loan Debit.

How do I get these to reflect on the books of the Company from which the payment has been made originally? I would like to streamline these so that we can pick up quickly if a loan was repaid or not.

Do I do a Journal entry for both Companies? And if so - how would I do this?

Thanks!!!!

Rainflurry · ‎October 21, 2022

@Renevp 4

Just to confirm - the loan was made from Co. A and repaid to Co. B, correct? And, Co. B will be reimbursing Co. A?

If that's the case, in Co. B, set up a 'Due to Co. A' other current liability account.

In Co. B, when you record the loan payments received, assign them to the newly-created 'Due to Co. A' liability account. When B reimburses A, assign the same 'Due to Co. A' liability account to the payment.

Then, in Co. A, receive the payment from Co. B and assign the employee loan to the deposit. This will reduce the loan receivable and all should be good.

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Loan Repayment into another Company

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