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Post Info TOPIC: loan repayments
stephen72


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loan repayments
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Hi ,
      Can i just check that i am doing the repayments for a business loan correctly.

the loan aount was for £5600 and the payments are £127.57 per month for 60 months so total payable is £7654.21.
so the interest is £2054.21  divided by 60 =£34.23 per month

i am going to CR bank with £34.23 and post it to the code i have set up for loan interest and again CR bank with £93.34 and post it to the nominal code where the original loan amount was posted to.

thanks
stephen


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Wella


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Looks OK to me Stephen

Bill

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stephen72


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Thanks Bill,
Just wanted to make sure i got it right
stephen

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Davey


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The Opening Balance of the Loan Account should be 7654.21 after 12 months of payments
of 127.57 it should leave you with a credit balance of 6123.37 on the loan account this is
the Balance that should be on the credit side of the TRIAL BALANCE AND LONG TERMS LIABILITIES ON THE BALANCE SHEET A FIGURE OF 6123.37 is what you should have. consider
Jounal Entries to Transfer the loan interest so as you can keep the Actual Loan Account Balance
Accurate.

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David
stephen72


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Hi,
does this mean that i would take the full payment off the loan as i thought i would have to do it the way above.If the way above is not the way how would i deal with the interest payments
stephen

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Davey


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I Would follow your initial plan. I was Just looking at the overall balance of the Loan Account
keep things simple as you originally meant your postings to be.

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David
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