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Sage Line 50 - Journal Question

I you have a nominal account for loans (2300’s) which had a starting balance but there wasn’t a bank account for it.

I have been posting the interest to the loan account each month (CR 2300’s) and overhead (DR 7000’s).

A supplier gave a refund and it was paid into the loan account, it cleared the balance of the loan and the remainder was transferred to the current account. I posted the refund (transfer) to the direct expense nominal (6000’s).

I now need to journal and balance the loan account. It currently sits at CR 674.50 and the overhead interest nominal shows as DR £43.80.

I hope this all makes sense!

Anyway, what journals should I post to bring the loan account to £0.00

Thanks,

Jo :)

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17th Jan 2013 11:18

I Think...

I assume the £674.50 represents the difference between the outstanding amount of the loan in the accounts and the actual figure the lender required you to pay in order to settle the loan?

If so then I believe it would go to interest payable to reverse the over-provision from prior years.

 

Cheers

Pat

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By JoJo123
17th Jan 2013 12:07

Your first point is correct.

No interest provision was made for the loan in overheads (7000's), it was completed monthly when receiving a bank statement, each month I completed the following journal;

CR £X.XX - 2300's Loan account

DR £X.XX - 7000's Loan interest paid

 

So are you suggesting the following journal;

DR £674.50 - 2300's Loan account

CR £674.50 - Where??

 

Do I also just leave the DR £43.80 showing on Loan interest paid (7000's) or do I need to journal this?

Thanks,

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17th Jan 2013 13:20

Interest Payable

It would then credit 7000's.  I assume that the interest was being charged in advance so, when you paid the balance in full, there was a reversal of some of the interest already charged.

As you're receiving statements then you should get a final statement at some point showing the zero balance and all of the transations that got you there, but 7000's will suffice for the moment I'm sure!

 

Cheers

Pat

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