how do i book a payment from one company to another to paydown a loan?
Accounting j/e for transfering $ from one company to another?
This actually requires two JE%26#039;s. Each company should have its own set of books and because the money is leaving one company and entering another, you need to make an entry in both sets of books.
On the set of books making the payment you want to
Dr. Loan Payable
Dr. Interest Expense (optional)
Cr. Cash
On the set of books receiving the payment, you want to
Dr. Cash
Cr. Interest Income (optional)
Cr. Loan Receivable
The interest is optional because two companies owned by the same person sometimes opt not to record interest.
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