paid to mrs majumdar by cheque against a loan granted to her
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Answer:
What is the journal entry when you are lent money from a bank?
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A2A - If you've actually received cash, or a check that is deposited into your bank account, you would debit your cash/checking account, and credit a new Notes Payable account for the bank loan.
When you have interest to accrue on the loan, you would debit Interest Expense and credit an Interest Payable account, or you can credit the same Notes Payable account to keep the balance in the account the same as what your loan balance will reflect.
When you make a payment on the loan, you would credit cash/checking and debit the Notes Payable account (and Interest Payable for the interest portion of the payment if you were tracking it separately as noted above).
If it's a line of credit that you'll be using over time, you'll create a new liability account for the LOC and you'll only make entries to it when you actually use it or make payments on it, just like a credit card.
If the loan is used to purchase an asset rather than getting a check, cash, or line of credit, you would create an asset account and debit it for the amount of the asset, and credit the Note Payable for the amount of the loan. If you paid a portion of the asset yourself in addition to the loan, you would credit cash/checking for the amount you paid to equal the total purchase price of the asset.
Answer:
bank a/c Dr to majumdar's a/c