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Shane-CPA
Shane-CPA , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 265
Experience:  Shane Northrop is a Certified Public Accountant, Personal Financial Specialist and a Chartered Global Management Accountant
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I have a 5 year loan for 2012, where does it get categorized

Customer Question

I have a 5 year loan for 2012, where does it get categorized in a financial statement?
Submitted: 3 years ago.
Category: Finance
Expert:  Shane-CPA replied 3 years ago.

Shane-CPA :

Hello...my name is Shane and I am a Certified Public Accountant. I look forward to assisting you with your tax question.

Shane-CPA :

A loan in excess of one year (in this case 5 years) would be listed on the Balance Sheet under the category Long-Term Liabilities.

Shane-CPA :

If the loan is from a bank, for example such as Chase Bank, you would then list the title such as "Loan from Chase Bank" as a sub-item under the Long-Term Liabilities section.

Shane-CPA :

I hope this helps to answer your question. If you would like further assistance, explanation or clarity, please let me know.

Shane-CPA :

If this answers your question to your complete satisfaction, then I thank you for allowing me to assist you and I look forward to assisting you again in the future. Please provide me with positive feedback so I may receive credit for my response. If you feel exceptional service was provided, bonuses are greatly appreciated. Thank you again and I hope you have a Great Day!

Customer : Ok. That's where I have it....but I just felt like it should be somewhere else. Do I show the lump sum of funds coming in somewhere?
Shane-CPA :

Yes...when the money comes into the company (if it's cash)...you would increase the bank account of the company. Essentially you would have a journal entry of a debit to cash and a credit to "Long-Term Liabilities". This entry increases both the asset and liability account by the amount of the loan and cash deposited into the company account.

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