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# 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 **Accounting > Chart of Accounts > Create New Account:**

![](https://storage.crisp.chat/users/helpdesk/website/-/a/b/8/8/ab884d8153100800/screenshot-wwwrefrenscom-20250_h78520.png =800x304)
Once you click on **“Create New Account”**, a pop-up form will appear:

![](https://storage.crisp.chat/users/helpdesk/website/-/a/b/8/8/ab884d8153100800/screenshot-11_113zguq.png =800xauto)

In this form, add the following details:

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

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

3. **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**:

![](https://storage.crisp.chat/users/helpdesk/website/-/a/b/8/8/ab884d8153100800/screenshot-wwwrefrenscom-20250_1brzyw.png =800x289)

1. **Journal entry in case of a loan taken by a business:**

![](https://storage.crisp.chat/users/helpdesk/website/-/a/b/8/8/ab884d8153100800/screenshot-wwwrefrenscom-20250_11xj2ol.png =800x333)

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

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

![](https://storage.crisp.chat/users/helpdesk/website/-/a/b/8/8/ab884d8153100800/screenshot-wwwrefrenscom-20250_g6blxw.png =800x336)
* Credit: Cash/Bank A/c
* Debit: Employee Loan A/c

3.  **Journal entry in case of loan repayment:**

![](https://storage.crisp.chat/users/helpdesk/website/-/a/b/8/8/ab884d8153100800/screenshot-wwwrefrenscom-20250_17wqnpz.png =800x325)
* 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__](mailto:care@refrens.com) or contact us via live chat support for quicker assistance.