What is a loan?

Loan is a special account for banks and other financial enterprises, and is an asset account. Non-banks and other financial enterprises can set this account.

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Response time: 2021-04-21. For the latest business changes, please refer to the official website of Ping An Bank.

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What are the loan subjects?

Loans are liability subjects.

According to the repayment period of liabilities, they can be divided into accounts reflecting current liabilities and accounts reflecting long-term liabilities. And when applying for a loan, it can also be divided into long-term borrowing and short-term borrowing.

Short-term loans refer to various loans borrowed by enterprises from banks or other financial institutions with a repayment period within one year based on the needs of production and operations, including production turnover loans, temporary loans, etc. The opposite is long-term borrowing.

Long-term borrowings are loans borrowed by enterprises from banks or other financial institutions with a term of more than one year. Long-term loans can be divided into loans for capital construction, technological transformation and production and operation according to the purpose of the loan. According to the different repayment methods, they can be regular one-time repayment and installment repayment.

Main characteristics of liabilities:

Liabilities are current obligations borne by the enterprise.

The settlement of liabilities is expected to cause economic benefits to flow out of the enterprise.

Liabilities arise from past transactions or events.

What accounting subjects do loans belong to?

Loans are asset subjects;

Loans are special subjects for financial enterprises such as banks. For financial enterprises, they are assets. Non-bank and other financial enterprises can set this account. The accounting treatment principles for loans and receivables are roughly the same as held until maturity.

Specifically:

1. Loans issued by financial enterprises according to current market conditions should be the sum of the principal of the loan and related transaction costs as the initial recognition amount. General enterprises Claims receivable resulting from external sales of goods or provision of services should usually be based on the contract or agreement price receivable from the buyer as the initial recognition amount.

2. The interest income recognized during the loan holding period shall be calculated based on the actual interest rate. The actual interest rate shall be determined when the loan is obtained and shall remain unchanged during the overdue period of the loan or a shorter period of use. .If the difference between the actual interest rate and the contract interest rate is small, the interest income can also be calculated based on the contract interest rate.

3. When an enterprise recovers or disposes of loans and receivables, the difference between the price obtained and the book value of the loan and receivables shall be included in the current profit and loss. Accounting entry setting accounts Setup Loan--Principal Loan--Interest Adjustment Loan Loss Allowance Loan--Impaired.

What accounting items are recorded for bank loans?

The accounting treatment of bank loans is as follows:

1. When receiving a loan

Borrow: Bank Deposits

Loans: long-term borrowings

2. When accruing interest

Debits: financial expenses

Loans: interest payable

3. Monthly repayment and interest

Borrow: interest payable

Loan: bank deposit

Borrow: long-term loan

Loan: bank deposit

4. If it is repaid, it will be like this:

Debit: financial expenses - loan interest

Loan: bank deposit

Extended information

Long-term borrowings can be divided into: policy bank loans, commercial bank loans and loans from other financial institutions.

1. Policy bank loans refer to banks that perform national policy loan business and issue loans to key national construction projects or local government construction projects, usually long-term loans.

For example, the loans provided by the China Development Bank to meet the funding needs of enterprises to undertake national key projects also include export credit payments.

2. Commercial bank loans refer to loans provided by commercial banks to enterprises to meet the needs of enterprises for production and operation funds, including long-term and short-term loans.

3. Loans from other financial institutions mainly refer to trust investment loans in monetary and physical forms obtained from trust investment companies; various commercial medium- and long-term loans obtained from financial companies; projects and projects obtained from insurance companies. Property and other insurance loans.