Forum Discussion

Margriet's avatar
Margriet
Experienced User
5 years ago

How do I make journal entry to record interest on bank loan

How do I make journal entry to record interest on bank loan? The monthly payments are recorded in "banking" but that does not reconcile the liability account that I have created for the loan.
  • redmx's avatar
    redmx
    5 years ago

    Apologies - posted b4 I was ready.

     

    Loan account        Debit $800

    Interest Expense    Debit $200

    Cheque Accounrt  Credit $1,000

     

    With a table mortgate the split between repayment on the loan account and interest will change with each payment , so these need editing every payment.

     

    I use recurring journals for splitting things such as phone/internet between business/personal as well as receipts where there multiple splits and an invoce was no previously issued.

redmx's avatar
redmx
Experienced User

For splitting payments such as this I often set up a recurring journal , which I can then easily edit if the amounts change.

 

For your scenario the journal would have three lines.  If for example the loan payment was for $1,000 , comprising $200 interest and $800 principle (loan repayment) than.

 

Debit Loan Account  $800

redmx's avatar
redmx
Experienced User
5 years ago

Apologies - posted b4 I was ready.

 

Loan account        Debit $800

Interest Expense    Debit $200

Cheque Accounrt  Credit $1,000

 

With a table mortgate the split between repayment on the loan account and interest will change with each payment , so these need editing every payment.

 

I use recurring journals for splitting things such as phone/internet between business/personal as well as receipts where there multiple splits and an invoce was no previously issued.

  • Margriet's avatar
    Margriet
    Experienced User
    5 years ago

    Thank you very much! So simple.

Looking for something else?

Search the Community Forum for answers or find your topic and get the conversation started!

Community home

Dig into MYOB Academy for free courses, learning paths and live events to help build your business with MYOB.