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

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

Quote:

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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

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Thanks very much.

Thanks very much.