Accounting for Unrecorded liabilities
My client has an unrecorded loan (from when Limited Company was a partnership) of £9,000. Solicitor letter confirms the balance.
Original loan was £15,000 and repayments of £6,000 were made by the limited company which the previous accountant charged as dividends.
No records exist for partnership business. The business is now VC backed and they have requested that the loan be recorded.
I have been advised that the outstanding loan liability of £9,000 was cleared up by various accounting entries when the partnership was disolved and the limited company was formed. (I can only view transactions in the accounting system since the limited company was formed.
Can anyone assist with the accounting entries to fix this?
Many thanks in advance
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