Give an employee loan to another company.

Question

An employee borrowed money from Company A. Company A wants to give that asset to Company B. What entries do both companies make to record the transaction properly?

aberi · Accepted Answer

I'm assuming Company A and Company B are related... You can make the following entry : In Company A in the General Journal: Credit: Loan Receivable for the amount of the loan and Debit Company B intercompany account. This way you have cleared out the loan in Company A and moved it to Company B. In Company B you will make the following entry in the General Journal. Debit Loan Receivable for the loan amount and credit Company A intercompany acct. This will set up the loan in Company B and show the amount came from Company A. 
 I'm assuming the companies are related and that you have an account in each company called intercompany in the Liabilities ledger accts. These two account , the one in A and the one in B should be exact opposite balances Ie Company A would show a debit for intercompany account and Company B would show a credit for intercompay account. 
 let me know if this works for you. This is how I move entries between our two related companies .

Sage 50 Canada

Give an employee loan to another company.

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