Where to put Loan in accounts

M

mouse2

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I am in partnership in a company. My brother gave a loan to this company. I personally paid back part of this loan to my brother as the company is unlikely to repay it any time soon. How do I account for this in my own personal accounts i.e. not the company accounts. Where do I put it in the balance sheet?
 
Are you in partnership with a company or a shareholder in the company.
The loan is recorded as a creditor in the company accounts, You have now techincally lent the company a sum which it has paid back to your brother. The company is a debtor of yours.
 
I am a 50% shareholder in the company. I will therefore put the loan as a debtor under current assets in my personal accounts. Thanks for your reply.
 
No I wouldn't agree with that treatment, I would say you account for it as drawings.
You can't show it as a trade debtor anyway, as it's not a debt owed to your sole trade as such, it is a loan debtor, owed to you in your capacity as director.
If your company goes bust and is unable to repay the loan, and you are carrying that loan on the balance sheet of your sole trade, you can't write it off like you would a normal bad debt...
Anyone agree / disagree?!
 
mandelbrot said:
No I wouldn't agree with that treatment, I would say you account for it as drawings.
You can't show it as a trade debtor anyway, as it's not a debt owed to your sole trade as such, it is a loan debtor, owed to you in your capacity as director.
If your company goes bust and is unable to repay the loan, and you are carrying that loan on the balance sheet of your sole trade, you can't write it off like you would a normal bad debt...
Anyone agree / disagree?!
Click to expand...

I would put to drawings as well. Bonus to you when you get back.

Also putting in debtors really oversates your balance sheet making it look better than it is.

Also in regard to soletrader the balance sheet some times means very little in some sets of accounts as a lot of people might just do a pl a/c only or both if carrying debtors/creditors/bank balances
 
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