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Long term loan payable journal entries
I rec'd money to start a business from a family member and make monthly payments for it. It's non-interest bearing and will take 5 years to repay. Does anyone know the proper accounting (journal entries) for the initial receipt of cash and monthly expense for repayment?
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Initial Receipt. DEBIT Cash Account $12,000 CREDIT Long Term Loan A/c $12,000 Being Long term loan for 5 years Received in Cash from Family Member. _____________________________ MONTHLY REPAYMENT. This is NOT an Expense it is loan Repayment in 60 instalments. DEBIT Long Term Loan A/c $500 CREDIT Cash Account $500 Being repayment of one monthly instalment on Long Term Loan. |
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