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General Accounting Discussions: How to reduce Loans Payable?

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    • CommentAuthormcclabg
    • CommentTimeApr 20th 2007
     
    I have a question. I have a bill on hand that I need to pay. It's a bill for printing costs that was generated by our company. The printing was done for an officer of the company. This officer has a Loan Payable account within the company for start up costs that he funded. We would like to pay this bill with the funds in his Loan Payable account - effectively reducing the amount of Loan Payable the company owes back to him.

    I can't get the debits and credits straight in my head. Can anybody help? Thanks!
    • CommentAuthorcajay
    • CommentTimeApr 20th 2007
     
    dr.loan payable
    cr. cash or A/P

    Reduce the payable, pay the bill with cash or a/p.
    You cannot use the funds directly, but you can decrease the liability.

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