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:


  1. Account Name: Add the account name according to the type of loan.


For example, business loans, employee loans, etc.


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


  1. 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:





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




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


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


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


3.  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.