zandee
Jul 31, 2007, 12:39 PM
If a company loans money to it's employees what is the correct entry on the company books?
Thanks
CaptainForest
Jul 31, 2007, 04:46 PM
Dr. AR/Loan Outstanding, whatever
Cr. Cash
conroypi
Aug 1, 2007, 11:37 PM
Dr. AR/Loan Outstanding, whatever
Cr. Cash
Captain Forest is correct. To make it easier to separate between employee loans and customer/client receivables, I usually set up a current asset account called EE loan. It functions like an accounts receivable account.
Dr EE Loan
Cr Cash
Hope this helps.
Adina