Ask Experts Questions for FREE Help !
Ask
    smayo's Avatar
    smayo Posts: 3, Reputation: 1
    New Member
     
    #1

    Nov 21, 2007, 02:59 PM
    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
    excon's Avatar
    excon Posts: 21,482, Reputation: 2992
    Uber Member
     
    #2

    Nov 21, 2007, 03:09 PM
    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
    smayo's Avatar
    smayo Posts: 3, Reputation: 1
    New Member
     
    #3

    Nov 22, 2007, 09:56 AM
    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.
    smayo's Avatar
    smayo Posts: 3, Reputation: 1
    New Member
     
    #4

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

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Looking for small town business-to-business service need I'm qualified for [ 5 Answers ]

I hope someone out there can help! Some entrepreneur who's already made this discovery and who can hep me do similar. Seems everything I can think of nobody would pay any $ for me to do. I am 7 yr stay at home MOM w/ 2 kids now just both in school and I really need to find work I can do to...

Student loan interest deductibility [ 1 Answers ]

In 2005, I was on F1 until Sept 30, and then my status was changed to H1B starting from Oct 1. CINTAX has determined that I had to use 1040NR-EZ to file my tax return. It said I was not eligible to claim student loan interest for my tax return since I was not in F1 visa status as of 31 Dec 2005....

Business to business vs Business to Consumer retail [ 1 Answers ]

How does Business to business retail differ from business to consumer retail?

Deductibility of interest and property taxes [ 1 Answers ]

What are the rules for deducing interest and taxes on a parcel of land that is brought as an investment with an intent to build and sell multiple housing units on the parcel in the near future?


View more questions Search