USA Pass through loans


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If a company has a loan but is making its subsidiary pay for the interest and eventually the principal, where is the liability recorded and how are the payments recorded?
 
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kirby

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Read the loan document to find which entity is named as borrower. That entity should have the loan debt liability and related interest on its books. If that is indeed the parent, then use intercompany accounts for the transactions between parent and sub.
 

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