How are you all reconciling the bounce back loan interest payments?
Especially when there’s a single transaction for the loan and interest from your bank?
What did you tag the original bounce back loan as?
If it were me I’d had created a seperate loan bank account for it, then any loan repayments are marked aa a transfer in to the loan account and you can then record 2 money out transaction, one for capital and one for interest, then tag seperately as loan repayment and interest paid.
BBLS loan payment received (drawdown) transfer to a Loan Account.
Calculate total interest payable over the term of the loan as shown in the loan agreement;
59 payments + final balancing payment - drawdown = total interest payable
Create a purchase receipt (date of drawdown) for the total interest payable with nominal ledger “Loan Interest” and pay invoice to the BBLS loan account.
Future repayments can be dealt with by a “bank tagging” rule and when the 60 payments have been made the loan account will be zero.
All well and good but your method will claim the whole 60 months interest in one financial year. Which is not correct.
Neither is using a purchase receipt since its not a purchase and should not be included in any vat returns if your vat registered.
What you should be doing if you really want to do it that way is use a journal and a balance sheet nominal which reduces upon each repayment.
Hello @Naz_Haque
This thread is from a while back, so the images are a bit different to how things look now. But the concept is still the same - Accounting for loans - #2 by Glenn
Hope this helps
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