director loan to purchase business vehicle

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Contributing Cover User Pickachiu
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director loan to purchase business vehicle

Hello everyone. I am new to the forum.

We lent our personal money to our company to purchase a business van. Please advise how we need to record the director loan to the business and the purchase of the van? And also how to record transactons when the company start paying money back to us in each month?

 

Thanks in advance.  

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Ultimate Partner Kym__Yeoward
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Re: director loan to purchase business vehicle

Hi @Pickachiu - welcome to the Community Forum !

 

For the loan, create an account under Current Liabilities - something like "2-xxxxx  - Vehicle Loan from [Pickatchui]". Then prepare a receipt in  Banking - Receive Money and allocate the loan amount (principal) to that account, with tax code N-T.

 

For repayments, create another account under Current Liabilities, called "2-yyyy - Vehicle Loan Repayments Clearing" - also with tax code N-T. When making the monthly repayments, allocate the payment to this account.

 

Then before the end of the financial year, have your tax accountant review the loan and the repayments made.

He/she will give you a journal entry, to split the repayments between the interest and principal portions.

If you give him online access as an Advisor,  he can enter the journal for you.

 

Strongly recommended -> contact your tax accountant first.

 

Kym Yeoward CPA & CC

Darwin (Palmerston) 

 

Cre

Ultimate Partner ronatbas
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Re: director loan to purchase business vehicle

@Pickachiu @Kym__Yeoward

 

We run a different system than Kym whereby the loan account is setup as a Credit Card type. in a formal loan where the interest is known and needs to be accounted for, we create an Unexpired Interest on Loan account immediately below the loan. This is populated by a Spend Money from the loan to Unexpired

The bill is paid from the Loan Account and the repayments are made bank to loan acc.

Ron B
BAS Group
03 95588477

info@basgroup.com.au
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Contributing Cover User Pickachiu
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Re: director loan to purchase business vehicle

hi Kym

 

Thanks for the advise.

 

So if I used your method, there will be 2 liabilites account but basically they are offseting each other? When they balance out, that when the loan is paid off? 

 

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Contributing Cover User Pickachiu
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Re: director loan to purchase business vehicle

Hi Ron

 

Can you please provide further instruction on " create an Unexpired Interest on Loan account immediately below the loan. This is populated by a Spend Money from the loan to Unexpired.

The bill is paid from the Loan Account and the repayments are made bank to loan acc"

 

Thanks. 

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