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RD
RD, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 8784
Experience:  MBA, CPA
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What is the journal entry when a company loan is settled for

Resolved Question:

What is the journal entry when a company loan is settled for an amount less than the original loan. ie the lender for gave a portion of the loan??

Thanks
Submitted: 6 years ago.
Category: Finance
Expert:  RD replied 6 years ago.
Is this entry in the books of the lender or in the books of the borrower?
Customer: replied 6 years ago.
In the books of the borrower. The lender forgave a portion of the loan.
Expert:  RD replied 6 years ago.

Loan Payable Dr
Bank Acct Cr (Amount Paid)
Cancellation of Debt Income Cr (with the loan amount forgiven)
Customer: replied 6 years ago.
RD

What type of Account is Cancellation of Debt Income?
Expert:  RD replied 6 years ago.
Other Income.
RD, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 8784
Experience: MBA, CPA
RD and 2 other Finance Specialists are ready to help you