What does it mean for a bank to recover the principal and interest of a loan?

The bank’s expenditure to recover the principal and interest of a loan is the payment of principal and interest within the provisions of the repaid loan. The accounting entries are:

1. When granting a loan: Borrow: Loan - Principal loan: Deposit absorption

2. When confirming interest income in installments: Borrow: Interest receivable Loan: Interest income

3. When the interest is actually received and deposited with the bank: Debit: Deposit with the bank: Interest receivable

4. When the principal is recovered: Debit: Deposits received, Loan: Loan - Principal

How do banks make accounting entries when issuing loans?

For banks: Loans and advances are asset accounts and the bank’s claims;

Deposits are Liability accounts of banks.

Entry entries:

Debit: loan--principal--a company

Credit: absorb deposits--corporate deposits- -A certain company

This is the entry when the bank issues a loan to the company. It also increases the bank's assets and liabilities. When the company uses the loan:

Debit: absorb deposits- -Corporate deposits--a company

Loan: cash (cash withdrawal)

or: Lianxinwang (transfer)

Accounting points for repaying bank loans How to record?

1. Accounting entries for repayment of bank loan interest:

1. When repaying bank loan interest normally:

Debit: Financial expenses - Loan interest

Lending: bank deposit

2. When repaying the bank loan principal when due:

Borrowing: shortfall loan or long-term loan

Loan: bank deposit

2. The accounting entries for interest paid on bank loans are:

1. Interest on short-term loans, when accrued:

Debit: Financial expenses - interest expenses

Loan: Interest payable

2. When paying:

Debit: Interest payable

Loan : Bank deposits

3. Accounting entries for enterprise loans from banks:

1. When an enterprise borrows money from a bank, it is judged whether it is a short-term loan or a long-term loan based on the length of the loan period. III. Anything within one year can be classified as short-term borrowing, and anything over three years can be classified as long-term borrowing.

2. When an enterprise receives cash, it prepares accounting entries based on the loan period.

Borrowing : Bank deposit

Loan: Short (long) term borrowing - bank loan

What does it mean for the bank to recover the principal and interest expenditure of the loan? The bank's recovery of the principal and interest expenditure of the loan is the payment within the provisions of the loan. Principal and interest. The editor has compiled the accounting entries for loan recovery and loan disbursement by banks. Please come and absorb it. Okay, that’s it for this chapter. See you in the next issue.