Employees loan


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Good day, I would like to know how will Balance sheet show the loan given to employees as receivable and how will it's entries been done.

Does separate loan account needs to be made for each employee loan and then double entry on cash on bank and employee loan to be done?

When receiving payment for loan how will it be entered
 
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Fidget

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To record the loan:

Dr Staff loans (balance sheet)
Cr Bank (balance sheet)

Do the opposite as repayments are received, unless the repayments are being taken via payroll. In which case the double entry will be:

Dr Payroll control account (balance sheet)
Cr Staff Loans (balance sheet)

If repayments are made in this way, then the payroll journal should do those entries without there being any need for an extra journal.

You don't have to have a separate account for each employee loan. You can have a single account for staff loans, so long as the entries to it reference the employee number in the original loan/bank journal and repayments journals. It keeps things tidy in the ledger.
 

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