October 30, 2016 admin

Overdraft/Lines Of Credit

Liabilities and Net Worth

BANK LOANS LIABILITY ACCOUNT
2055

ACCOUNT EXPLANATION
The amount of short-term or demand notes given to banks.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Demand note given to bank for loan CR
    Cash in Bank—General 1001
      Bank Loans 2055
             
  Payment on note to bank CD
    Bank Loans 2055
      Cash in Bank—General 1001
             
  Payment of interest on note to bank CD
    Interest—excluding Vehicle & Mortgage 8740
      Cash in Bank—General 1001
COMMENTS
  • A subsidiary record should be maintained showing details for each loan.
  • At the end of each month, a listing of amounts for each unpaid loan should be prepared and the total reconciled with the balance in this account.