Accounting treatment of company borrowing from legal person
1. When borrowing money, the accounting treatment is as follows:
Debit: bank deposit/cash on hand.
Loan: other payables/other receivables-name of enterprise legal person
2. When paying interest, the accounting entries are as follows:
Debit: financial expenses
Loan: other payables-interest
3. The accounting entries for repayment are as follows:
Debit: other payables-principal
Other payables-interest
Loan: Taxes payable-personal income tax
Cash, bank deposits
Related knowledge: How do enterprises make accounting entries when paying loan interest? What subjects should I debit?
Do companies have to pay taxes on borrowing from legal persons?
A: When an enterprise repays a loan to a legal person and pays interest, the legal person needs to pay personal income tax on the interest.
Accounting treatment of subsidiary borrowing from parent company
Borrow: cash or equivalent
Loans: Other receivables -XX Company
Interest:
Borrowing: financial expenses-loan interest.
Loans: Other receivables -XX Company
Is there any tax risk when a legal person borrows money from a company?
A: If a legal person fails to repay the company's loan for more than one year, the tax bureau can verify that it is a dividend to shareholders and needs to pay a tax.