Write off Directors Loan Account - apologies done to death

Write off Directors Loan Account - apologies...

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If a Director had lent cash to a Ltd company over several years and it is agreed that the loan will never be repaid back to the director and hence it is decided to write off the loan to the company what are the journal entries to be used? Debit DLA and credit ???? Apologies if this is "simple" Would it be profit b/f?
DM

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By AnonymousUser
01st May 2009 09:59

Cr DLA / Dr P&L
The answer to your question is :

Cr DLA / Dr P&L

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By User deleted
22nd Apr 2009 14:32

Suggestions re DLA
If the objective is to increase the shareholders funds then why not convert the loan into Share Capital?

If not, simpler just to leave it as an outstanding directors loan for ever. Circumstances change and maybe one day the money will need to be repaid to the Director.

If it is simply written off I am sure it will generate some kind of taxable gain on the company, which I would imagine you would want to avoid.

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By User deleted
04th Sep 2009 11:28

Wrong way round!

 Shouldnt it be dr DLA cr P & L?

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