Setup and Overdraft Account
Hi everyone, Can someone please give me some guidance as to how to correctly set up an overdraft account (which is a loan) in MYOB. I have the total amount and we've made 2 drawdowns and I al...
Forum Discussion
Thanks Genreve,
I just wanted to check if an overdraft setup is the same as a normal loan.
For example, if the loan amount is for $100k, but the first draw down is only for $20k, do I only receipt the drawdown amount?
or
Do I enter the balance of the account as the full approval amount, eg $100k and just do a funds transfer when we drawdown from it?
Just wanted to ensure that i was entering it correctly from an accounting perspective as it's different to a normal loan.
Cheers
Mary
Hi Mary,
Great question. An overdraft is a revolving limit, so you only record what you actually use, not the full limit. So it's different in how you record the principal amount: you record each drawdown as it happens. Repayments work the same as a normal loan: split the payment between principal (to the overdraft) and interest (to Interest Expense).
Regards,
Genreve
