Interco Loan A/c on Sage - The Book-keepers Forum (UK)

Lisa Jo · Senior Member

Interco Loan A/c on Sage

Lisa Jo · Senior Member

I would need to debit the loan a/c & credit the bank but in effect the bank is paying it out but needs to receive it in to pay the creditor???

Marky65 · Guru

Hi

For the company that receives the loan, dr bank cr loan a/c and when they use the funds cr bank dr creditors (or whatever)

Regards

Mark

Lisa Jo · Senior Member

but theres 5 points to the journal, its the missing bit i just cant get my head around. The loan ac has to go thru the bank to pay the creditor, where does the other half go? Do i leave the loan ac as it is & not touch it at all?

RobH · Expert

Are these the transactions Lisa or am I missing something:

Co A loans money to co B
Co B pays a supplier of Co B?

If so then in books of Co A : dr interco loan, cr bank

Books of CO B : dr bank, cr interco loan and cr bank, dr creditors

or am I misunderstanding something?

Rob

Lisa Jo · Senior Member

ah Rob, do you think I have to do the 2 payments via bank in & out as that could be the missing link?

RobH · Expert

HiLisa,

yes because the money has gone into the bank, or are you saying that Co A is paying a supplier of Co B directly? If this is the case I would set up a new bank (if in Sage, perhaps 1220 if it isn't being used) and call it something like inter-co loan a/c. The money would need to go into the bank in order to pay off the supplier if the invoice is on the purchase ledger.

Rob

RobH · Expert

Also if you use 'inter-co loan a/c' it should always be zero once the supplier has been paid. And of course the balance on 2300 in Co A should be an equal but opposite balance of 2300 in Co B.

Lisa Jo · Senior Member

ive just done that journal & now have to payments to reconcile in the bank a/c so im down by that amount, in effect ive paid it twice, thnk im going mad

Rhianrach · Expert

The answer is 42

Lisa Jo · Senior Member

So, to get this right then. Im not to touch the 2300 loan a/c - this will stay the loan a/c on the balance sheet (i have debits and credits on there as he transfers money from one to the other, pays creditors from one to the other etc).

RobH · Expert

No need to touch 2300 when paying the supplier, as Co B has borrowed money from A and that loan has already been credited. The balance now shows how much B owes A. However B's bank balance has increased (or the notional interco bank a/c), and that will decrease once the supplier has been paid. the loan is still outstanding though, much like if I lend you £100 to pay your electric bill and you pay your electric bill, you will still owe me £100. Unless I am getting hold of the wrong end of the stick.

RobH · Expert

So long and thanks for all the fish Steve.

Lisa Jo · Senior Member

Just opened a bank a/c & put the br through to pay supplier but nominally coded it to 2300 & now ive got debit on bank & credit on loan ac so in effect it has the credit on the loan ac twice..i have to nominally code the br somewhere

Rhianrach · Expert

RobH wrote:

So long and thanks for all the fish Steve.

Sorry misread the opening post I thought Lisa was asking for the answer to the ultimate question of life, the universe and everything, sorry. blankstare

RobH · Expert

No that's just what you thought you read but in actual fact the mice have controlled your every movement!

Lisa Jo · Senior Member

Think Ive done it Rob. If I put through the BR as the same as supplier (ie) telephone 7502 & then pay it off via this new bank account under supplier account (under 7502) then it seems to be working, I was putting through BR on 2300 which in effect was increasing the liability twice, this shouldnt in effect increase the expenses on the nominal account should it? Ill soon find out, Ill run a tb tomorrow & see how it goes..Your a good un !!

Rhianrach · Expert

RobH wrote:

No that's just what you thought you read but in actual fact the mice have controlled your every movement!

42!??!!#

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Lisa Jo · Senior Member

Hey, I can laugh about it now, but it drove me mad all afternoon.. I was trying to hard to link in the intercompany loan a/c to the audit trail.. hey, Rob is worth his weight in gold.

RobH · Expert

That's a bit more weight than I would care to admit to Lisa!

Lisa Jo · Senior Member

Im sure not Rob. Ive done all my Intercompany transactions today, it was approx £98k going through, it took me ages, good Im a dab hand with journals isnt it? Tnx again!