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VACheryl
Level 1
posted
‎April 06, 2022 06:19 PM
last updated ‎April 06, 2022 8:08 PM

Should we write off unpaid loan that has passed the statute of limitations?

Hi everyone, 

If the unpaid loan is already beyond the statute of limitations, should we remove it from the books? If yes, how do we write it off?

Thanks for the help!

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2 Comments 2
Rustler
Level 15
‎April 07, 2022 04:30 AM

Should we write off unpaid loan that has passed the statute of limitations?

I would write it off

 

Assuming the loan was made to others, and sits in an asset account, a journal entry will do it.

Debit Bad Debt Expense and credit the loan account for the total in the loan account

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VACheryl
Level 1
‎April 07, 2022 07:43 AM

Should we write off unpaid loan that has passed the statute of limitations?

The loan I meant is the company's debt. When writing this off, this will be credit to Other Income, right?

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