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
  1. Accounts and Finance
  2. Step 2 Passing Routine Entries
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .