Term Loans

[Former Member]

Hi

How can I treat Term Loan accounts? Do I make one reconciliation account and treat each term loan as a vendor? Or do I make each term loan as a G/L Account?

[Former Member]

Hi,

Term loan accounts are not reconcilaition accounts.

For Eg: we take loan from Bank , the accounting entry is

cash AC Dr.

To. Bank Term loan a/c

here we gave credit to term loan a/c, but not to Bank account. So we need not to create term loan account as reconcialiation account. If we maintain interest indicator in GL account, we can post the intereset automatically.

If helpful plz assign points.

Thanks & Regards

Sunitha.