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Directors Loan Transactions

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Hi,

My employers have a Directors Loan account where the company owes the Director (the director loans money to the company to aid cashflow).

We have a number of purchases and expenses that have been purchased for the director that need to be offset against the loan (i.e. reducing the loan amount) e.g. Mobile phone hire for directors family, medical insurance, car hire etc

What would the accounting jnl be to do this please.

Thanks very much.

Dave Cooper

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By Paul Crowley
17th Jul 2020 14:11

If you have an accountant ask the accountant.
Loads of journals take longer to understand than 2 minutes on the phone

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By RWeg
17th Jul 2020 15:06

Hi, the Director's Loan account (A Creditor) needs to be debited with any personal expenses to reduce the amount owed to the Director. Don't reclaim VAT on such items to reduce the amount owed to the Director more quickly. If shifting costs already paid/enterd Debit the Directors Loan account and credit the appropriate expense account and credit the "VAT - Input Tax account". Hope that helps.

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RLI
By lionofludesch
17th Jul 2020 16:10

You shouldn't need a journal.

You need to post the payments direct to the DLA.

So - where have you put them at the moment ?

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By thestudyman
17th Jul 2020 17:54

Double entry is DR Directors Loan, CR Bank - obviously not posted as a journal, but allocating the payment directly to the DLA

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