Typical Transaction 18
Example: Receive Loan in Euro for 50,000 Pounds
Typical Transaction 18 (TT18) is associated to Typical Transaction 22 (TT22) and Typical Transaction 23 (TT23)
Accounting procedure is as follows:
> Enter new addition to Bank in field ‘’Loan Amount in GBP’’: 50,000
> Double entry: Debit entry Bank balance augments by 50,000
> Loan term Loan augments by 50,000
Accounting procedure is as follows:
> Enter new addition to Bank in field ‘’Loan Amount in GBP’’: 50,000
> Double entry: Debit entry Bank balance augments by 50,000
> Loan term Loan augments by 50,000
The entries for this transaction in the Accounting System can be seen here, in the AccountingLab and in the Accounting System, Operation O43, Q2:
| Receive Loan form Bank | Increase in Bank (+) |
|---|---|
| Increase in Long Term Loan (+) |
Typical Transaction 22
Accounting procedure is as follows:
> First, in TT18 in field Enter Amount ‘’Enter Loan Amount’’ in GBP enter 50,000
> Second, click ‘’Apply Change ‘’ The screen of TT18 with new balance sheet will appear.
> Third, in TT18 click ‘’See how TT18 affects TT22 and TT23’’
> Fourth, in TT22 ‘’Repayment of Loan in Euro” the new balance sheet for this transaction will appear
> Double entry: Debit entry Long Term Loan balance decreases by 47,484
> Credit entry Cash at bank decreases by 47,484
> Long term Loan augments by 50,000
> First, in TT18 in field Enter Amount ‘’Enter Loan Amount’’ in GBP enter 50,000
> Second, click ‘’Apply Change ‘’ The screen of TT18 with new balance sheet will appear.
> Third, in TT18 click ‘’See how TT18 affects TT22 and TT23’’
> Fourth, in TT22 ‘’Repayment of Loan in Euro” the new balance sheet for this transaction will appear
> Double entry: Debit entry Long Term Loan balance decreases by 47,484
> Credit entry Cash at bank decreases by 47,484
> Long term Loan augments by 50,000
The entries for this transaction in the Accounting System can be seen here, in the AccountingLab and in the Accounting System, Operation O114, Y2:
| Repayment of Long Term Loan | Decrease in Cash at Bank (-) |
|---|---|
| Decrease in Cash at Bank (-) |
Typical Transaction 23
Accounting procedure is as follows:
> First, in TT18 in field Enter Amount ‘’Enter Loan Amount’’ in GBP enter 50,000
> Second, click ‘’Apply Change ‘’ The screen of TT18 with new balance sheet will appear.
> Third, in TT18 click ‘’See how TT18 affects TT22 and TT23’’
> Fourth, in TT22 ‘’Repayment of Loan in Euro” the new balance sheet for this transaction will appear
> Fifth, in TT23 ‘’Adjustment for Currency Loan in Euro” the new balance sheet for this transaction will appear.
> Double entry: Debit entry Retained Earning balance increases by 2,516
> Credit entry Long Term Loan decreases by 2,516
> First, in TT18 in field Enter Amount ‘’Enter Loan Amount’’ in GBP enter 50,000
> Second, click ‘’Apply Change ‘’ The screen of TT18 with new balance sheet will appear.
> Third, in TT18 click ‘’See how TT18 affects TT22 and TT23’’
> Fourth, in TT22 ‘’Repayment of Loan in Euro” the new balance sheet for this transaction will appear
> Fifth, in TT23 ‘’Adjustment for Currency Loan in Euro” the new balance sheet for this transaction will appear.
> Double entry: Debit entry Retained Earning balance increases by 2,516
> Credit entry Long Term Loan decreases by 2,516
The entries for this transaction in the Accounting System can be seen here, in the AccountingLab and in the Accounting System, Operation O115D, Y2:
| Currency Gain of Loan | Increase in Retained Earnings (+) |
|---|---|
| Decrease in Long Term Loan (-) |
| Balance Sheet | ||||
|---|---|---|---|---|
| Original | After Changes TT18 | After Changes TT22 | After Changes TT23 | |
| Assets | ||||
| Current Assets | 767,850 | 817,850 | 770,366 | 770,366 |
| Bank | 758,550 | 808,550 | 761,066 | 761,066 |
| Debtors and Prepayments | 9,300 | 9,300 | 9,300 | 9,300 |
| Other Current Assets (Stock) | 0 | 0 | 0 | 0 |
| Fixed Assets | 44,000 | 44,000 | 44,000 | 44,000 |
| TOTAL ASSETS | 811,850 | 861,850 | 814,366 | 814,366 |
| Liabilities | ||||
| Current Liabilities | 44,300 | 44,300 | 44,300 | 44,300 |
| Creditors | 44,000 | 44,000 | 44,000 | 44,000 |
| Accruals | 300 | 300 | 300 | 300 |
| Long Term Liabilities | 0 | 50,000 | 2,516 | 0 |
| Long Term Loan | 0 | 50,000 | 2,516 | 0 |
| Equity | 767,550 | 767,550 | 767,550 | 770,066 |
| Shareholders’ Equity | 800,000 | 800,000 | 800,000 | 800,000 |
| Income Statement | -32,450 | -32,450 | -32,450 | -29,934 |
| TOTAL Liabilities + Equity + Retained Earnings | 774,450 | 851,850 | 814,336 | 814,336 |