Asset Management: Detailed Accounting Of Short Term Loans

Short term loans refer to all kinds of loans borrowed from banks or other financial institutions with a term of less than one year (including one year).

1. acquisition of short-term loans

Business from banks or others

When borrowing money, a loan contract should be signed, indicating loan amount, loan interest rate and repayment time.

When obtaining short-term loans, you should debit "bank deposit" subjects and credit short term loans.

2. interest expense on short-term loans

Interest expenses incurred by enterprises in obtaining short-term loans should normally be treated as financial expenses and included in the profits and losses of the current period.

Banks or other financial institutions usually collect interest on loans at the end of the quarter according to the quarter. Therefore, the interest of short-term borrowers is required at the end of the month.

Three

Reimbursement

When a short-term loan is due to repay the loan principal, an enterprise should borrow the "short-term loan" subject and credit the "bank deposit" subject.

Application practice

[case] an enterprise borrowed short-term loans from banks for 100 thousand yuan on 1 January 2011, with a period of six months, an annual interest rate of 6%, interest on a monthly basis, quarterly payments, and a repayment of the loan principal after maturity.

According to the above economic business, enterprises should do the following things.

(1) when borrowing money in January 1st, the entry is as follows:

Borrow: bank deposit 100000

Loan: short-term borrowing 100000

(2) at the end of 1, the accounting entries are as follows:

Accrued interest =100 000 x 6% x 12=500 ($)

Borrowing: financial cost 500

Loan: interest payable 500

2 the accounting treatment of interest payable at the end of the month is the same as above.

(3) at the end of 3, the accounting entries for the interest paid for the quarter are as follows:

Borrowing: financial cost 500

Interest payable 1000

Loan: bank deposit 15000

The accounting treatment for the next quarter is the same as in the previous quarter.

(4) when the loan maturity is returned to principal in July 1st, the entry is as follows:

Borrowing: short-term borrowing 100000

Credit: 100000 of bank deposits.

In order to calculate short-term loans of enterprises, a short-term loan account should be set up. The credit of the subject obtains the principal amount of the loan, the borrower registers and refunds the principal amount of the loan, and the remaining balance deposits the lender, indicating the amount of the loan principal that has not yet been paid.

The accounts should be detailed in terms of types of borrowers, borrowers and currencies.