How to record journal entries for loan-related transactions? (Business Loans, Employee Loans, Loan Repayment, etc.)

Let's see how you can record journal entries for loan-related transactions on Refrens.

**Step 1: Create Ledger Account**

Navigate to Advanced Accounting > Chart of Accounts > Create New Account:


Once you click on “Create New Account”, a pop-up form will appear:



In this form, add the following details:

Account Name: Add the account name according to the type of loan. For example, business loans, employee loans, etc.

Account Group: Select the respective accounting group from the drop-down.

Opening Balance: Add the opening balance.

Once done, click “Submit.”

**Step 2: Record Journal Entry**

Navigate to Voucher Books > Open Journal Voucher Book > New Entry:



Journal entry in case of a loan taken by a business:



Debit: Bank/Cash A/c
Credit: Loan A/c

Journal entry in case of a loan taken by an employee:


Credit: Cash/Bank A/c
Debit: Employee Loan A/c

Journal entry in case of loan repayment:


Debit: Loan A/c
Credit: Cash/bank A/c

That's it!
If you still have questions, reach out to us at __care@refrens.com__ or contact us via live chat support for quicker assistance.

Updated on: 28/05/2025