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    Missy56's Avatar
    Missy56 Posts: 1, Reputation: 1
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    #1

    Apr 12, 2008, 11:49 AM
    Equity accounting
    I assume that principle repaid on a bank loan becomes equity. Do I use a journal entry to adjust the equity to reflect the amount of principle repaid in 2007?
    MaggieMouse's Avatar
    MaggieMouse Posts: 226, Reputation: 8
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    #2

    Apr 12, 2008, 12:05 PM
    If you are talking about mortgage principles, it would become equity when it is repaid. However, if this is just a simple accounting question, no it's not equity, yes you need to make a journal to debit loan payable and credit cash.
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