Ask Me Help Desk

Ask Me Help Desk (https://www.askmehelpdesk.com/forum.php)
-   Accounting (https://www.askmehelpdesk.com/forumdisplay.php?f=19)
-   -   Classifcation and deductibility of business loans (https://www.askmehelpdesk.com/showthread.php?t=154608)

  • Nov 21, 2007, 02:59 PM
    smayo
    Classifcation and deductibility of business loans
    If I make a business loan to someone from my company, do I classify it as an asset or a liability and is the loan a deductible expense until it's paid back?

    Thank you,
    Stacey
  • Nov 21, 2007, 03:09 PM
    excon
    Hello Stacey:

    It's an asset since you don't owe it. It's owed to you. And, it isn't an expense either, cause you haven't spent anything. You've just turned one asset (cash) into another asset (note).

    You debit it from the cash column and credit it to the notes receivable column. Things should balance.

    excon
  • Nov 22, 2007, 09:56 AM
    smayo
    Quote:

    Originally Posted by excon
    Hello Stacey:

    It's an asset since you don't owe it. It's owed to you. And, it isn't an expense either, cause you haven't spent anything. You've just turned one asset (cash) into another asset (note).

    You debit it from the cash column and credit it to the notes receivable column. Things should balance.

    excon


    Thanks very much.
  • Nov 22, 2007, 09:58 AM
    smayo
    Thanks very much.

  • All times are GMT -7. The time now is 12:35 PM.