AccountRight information, hints and tips

[abayr]

Hi there,

how do you account for a loan to another company?

i know how to setup a loan to a bank as a liability, but i am not sure if it is the same procedure if setting up a loan to a company.

does anyone know what the best approach is?

[boba]

The loan is an Asset as you are owed the money. So set up a new account in the Assets section. Whether it is Short or Long Term, depends on the details. If you have advanced the outside business the loan in cash, you simply debit the new Loan Account from your Cash Payments.

Bob