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Post Info TOPIC: Intercompany loan a/c
Rochie


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Intercompany loan a/c
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Hi Guys,

please can you pass on your superior wisdom

Company a has paid company b's invoices

what is the journal entry

COMPANY A

dr intercompany

cr bank

COMPANY B

dr creditors

cr bank

Is this correct and what happens when its repaid? Thanks in advance



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VinceH


Expert

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My inclination would be to set up the intercompany account as a bank account on whatever system you are using.

That way, if Company A pays Company B's invoices, the transactions are:

* On Company A's accounts; a transfer from their bank account to the intercompany account

* On Company B's accounts; a supplier payment from the intercompany account to the relevant suppliers.

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Vince M Hudd - Soft Rock Software

(I only came here looking for fellow apiarists...)
MarkS


Expert

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I would record as follows:

To record Company A paying for Company B costs

Company A

Dr Intercompany Debtor

Cr Bank

Company B

Dr Expense or Creditors (if invoice been posted to Creditors Control A/C)

Cr Intercompany Creditor

Then when paid

Company A

Dr Bank

Cr Intercompany Debtor

Company B

Dr Intercompany Creditor

Cr Bank

Regards

Mark



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Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.
Rochie


Veteran Member

Status: Offline
Posts: 34
Date:
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Thank you so much, you guys have completed the missing puzzle and ended the chasing of my on tail.

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