Term Loan refers to Loan taken for limited period of time.

Whole amount including Interest is repaid either together at once or in instalments (EMI)

 

 

Entry for Loan Taken

Bank A/c Dr

      to Loan A/c

 

Entries for Interest

Interest A/c Dr

   To Loan A/c Dr

 

Entry for Loan Repaid

Loan A/c Dr

    To Bank A/c


 

 

LOAN ENTRIES ASSIGNMENT

Pass Entry for Loan taken, Interest and Principal Repayment.

 

 

Unsecured Loan

Unsecured Loan taken from Akash & Co Rs 50000 @ 12% p.a.

Amount received by cheque.

It was repaid after 6 months together with Interest

View Answer

 

 

Secured Loan EMI  

Term Loan was taken from PNB Bank 100000.

It was to be repaid in 4 monthly EMI of Rs 25628 as follows

 

Principal and Interest repayment chart (as given by Bank)

Month

Op Balance of Loan

EMI Repaid

Interest

Component

Principal

Component

Closing

Balance

of loan

1

100000

25628

1000

24628

75372

2

75372

25628

754

24874

50498

3

50498

25628

505

25123

25374

4

25374

25628

254

25374

0

 

Total

102512

2512

100000

 

 

View Answer

 

 

 

Term Loan for Asset Purchase

Building purchased for 100 lacs.from Ajay Properties on 1 July 2016

Amount spent on further construction =20 lacs

Total Project Cost=120 lacs

ICICI Bank gave loan at 75% of project cost @ 10% p.a

(120 lacs*75%=90 lacs)

Whoie amount repaid after 6 months including interest

Construction was complete by 31 Aug 2016

Pass Entries for Asset Purchased,Loan Taken,EMi and Interest Repaid

View Answer

 

Term Loan for Asset Purchase +EMI

Resolve last question assuming  EmI for Loan is 1544053 for 6 months as 

Month Op Balance of Loan EMI Repaid Interest Component Principal Component Closing Balance of Loan
July 9000000 1544053 75000 1469053 7530947
Aug 7530947 1544053 62758 1481295 6049652
Sept 6049652 1544053 50414 1493639 4556013
Oct 4556013 1544053 37967 1506086 3049926
Nov 3049926 1544053 25416 1518637 1531289
Dec 1531289 1544053 12761 1531292 0

 

Pass Entry for Loan taken, Interest and Principal Repayment.

View Answer
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CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
  • excal engineering's image
    excal engineering
    May 22, 2018, 2:21 p.m.

    under what head will term loan account will come ( Loans or Bank Od ac)

    View answer
  • DEVANG PUROHIT's image
    Explain this sum please
    Only entry Building A/C Dr 13500000
                               To Building WIP 13500000






    Term Loan for Asset Purchase

    Building purchased for 100 lacs.from Ajay Properties on 1 July 2016

    Amount spent on further construction =20 lacs

    Total Project Cost=120 lacs

    ICICI Bank gave loan at 75% of project cost @ 10% p.a

    (120 lacs*75%=90 lacs)

    Whoie amount repaid after 6 months including interest

    Construction was complete by 31 Aug 2016

    Pass Entries for Asset Purchased,Loan Taken,EMi and Interest Repaid

    View answer
  • DEVANG PUROHIT's image
    Explain this sum

    On 1 st july:

    Building WIP  Dr  10000000

       To  Ajay Properties  A/c 10000000

        (Being building purchased.)

     

    Loan from ICICI bank:

    Bank  A/c  Dr 9000000

      To  ICICI 10% Loan A/c 9000000

      ( Being loan amount received.)

     

    Building WIP  Dr  2000000

       To  Bank  A/c  2000000

       (Building construction charges)

     

    Interest on loan from ICICI bank (1 st july to 31 st August 2016)

     Building WIP   A/c  Dr  150000

       To  ICICI 10% Loan A/c 150000      

       (Being interest on loan during construction is capitalized.)

     

     

    Interest on loan from ICICI bank ( 31 stAugust 2016 to 31 st December 2016)

    Interest On Loan A/c  Dr   300000

      To  ICICI 10% Loan  A/c   300000

      (Being interest on loan charged after Construction Completed booked as expense)

     

     

    Building   Dr  13500000

      To  Building WIP   Dr   13500000

      (Being construction of building finally completed.)

     

    Repayment of loan:

    ICICI 10% Loan    A/c  Dr   9450000

      To Bank A/c  9450000

      ( Being loan repaid.)

    View answer
  • DEVANG PUROHIT's image
    ABOUT BUILDING PURCHASE 100LAC SUM ISSUE IS ONLY I WANT TO KNOW HOW TO PASSING ENTRY WITH 13500000
    BUILDING WIP DR 13500000
       TO BUILDING 13500000 PLEASE EXPLAIN
    View answer
  • Milan Mandaliya's image
    Why we can not use building instead of building wip
    View answer
  • Saichand G's image
    Sir in this buildings wip 13500000 how to calculate please tell me 

    Screenshot_2018-01-11-21-15-00-663_com.teachoo.teachoo.png

    View answer
  • ravi rawat's image
    Why interest amount capitalized ?
    View answer
  • Rajesh Chandrasaxena's image
    Rajesh Chandrasaxena
    Sept. 14, 2017, 2:26 p.m.

    taken loan 5000000 bank of maharastra .how can entry in tally

     

     

    View answer
  • Rahul Dev Maurya's image
    Rahul Dev Maurya
    Sept. 9, 2017, 12:19 a.m.
    what is unsecured loans?

    View answer
  • Akash Kodkani's image
    Already u passd joirnal for interest, then why did u pass again interest amount in PNB  loan??
    View answer
  • Shokeen Saifi's image

     Dear sir,

    As you mentioned above entry in unsecured loan, you have debited interest account twice, once at the time of interest due and another one at the time of payment..

    I am not a teacher, i am learner only like your other students  

    View answer
  • Payel Nandy's image

    Hello I am not getting calculations of last two question of this page. And even in 2Q  interest from 1st July to 31st April and then from 31st April to 31st Dec. Please expailn

    View answer
  • seema ahire's image

    Taken loan of Rs. 1050000 from  city financial a non financial company & they debited Rs. 35000/- as processing fees & paid net cheque to us,we deposited it in cash credit A/C. 

    View answer